Using language of mediation
Is there any way
1
Tourism and Local Economic Development
Tourism and Local Economic Development
How can businesses in travel and tourism increase
the contribution of the industry to local
economic development and pro-poor growth?
PARTNERS & SPONSORS2 Tourism and Local Economic Development
T
he International Tourism Partnership recently held an event entitled ‘Tourism and Local Economic
Development’. This event was chaired by Dr Harold Goodwin of the International Centre for Responsible
Tourism, University of Greenwich, and Chair of the Academic Advisory Panel of the International Tourism
Partnership and sponsored by Sco Wilson to examine tourism and local economic� development.
Key speakers included Stuart Robson of Sco Wilson who made a presentation on the Equator� Principles
and the policy frameworks; Dilys Roe of IIED on tourism in Poverty Reduction Strategy Papers; and Peter
Nize e of the International Centre for Responsible Tourism on the Nepalese government� national policy and
implementation strategy to tackle poverty, which has tourism as its focus.
Focussing on private sector initiatives, Caroline Ashley of ODI talked about their Pro-Poor Tourism Pilot in
South Africa; Susy Karamel of GTZ presented the results of their work on the local economic impact of allinclusives and Stephen Na ras of Exodus presented a tour operator’s perspective� on developing complementary
products.
Following the presentations, the seminar addressed the issue of “How can businesses in travel and tourism
increase the contribution of the industry to local economic development and pro-poor growth?” There were
participants from the industry, destinations, consultancies and research institutes.
THE CHALLENGE
The seminar raised a variety of challenges that face the tourism sector. How these challenges are met will certainly
influence the sector in the long-term, and it is clear that positive initiatives by the industry will enable local and regional
economic development, including that which has a poverty alleviation agenda, to take place in parallel with the needs of a
viable economic business. In fact, it was argued by some that these two components of tourism should not be separated.
To achieve this aim there needs to be a co-ordinated approach across the sector
and this includes the financiers, developers, operators, hoteliers and Government.
This task might best be achieved through adoption of a framework to guide those
involved in the sector.
The National Guidelines for Responsible Tourism developed in South Africa were
published by the Department for Environmental Affairs and Tourism in 2002 and they
were adopted as the national sector planning guidelines for tourism. The guidelines
cover the economic, social and environmental agendas for responsible tourism. The
section on Guiding Principles for Economic Responsibility is a specific checklist of
actions that people in the industry could take to increase the positive impact on local
economic development. For a copy of the Guidelines for Responsible Tourism visit
www.icrtourismsa.org where you can download South Africa’s Responsible Tourism
Guidelines and the handbook published in 2003 Responsible Tourism Handbook
2003.
These guidelines were developed with and for the industry in South Africa. It is recommended that, using the South
African example as a guiding principle, different guidelines could be developed for other destinations and that there is
scope to develop guidelines for particular parts of the industry for example hoteliers, tour operators and guides.
Introduction3
Tourism and Local Economic Development
LOCAL ECONOMIC DEVELOPMENT
AND POVERTY REDUCTION
The UN Millennium Development Goals include specific commitments to
reduce by one-half the proportion of people living in extreme poverty by 2015.
Poverty is a multi-faceted concept which embraces not only insufficient levels
of income but a lack of access to essential services such as education, water and
sanitation, health care and housing.
At the same time, the World Tourism Organization estimates that tourism
accounts for up to 10% of global gross domestic product, making it the world’s
biggest industry. The potential for tourism to contribute significantly to
poverty alleviation is considerable. Work since 1998 by the Pro-Poor Tourism
Partnership (Ashley, Goodwin & Roe) has demonstrated that tourism can
contribute to poverty reduction and that for many of the least developed
countries, and in many rural areas, tourism is one of the few current viable
strategies for economic development.
The World Tourism Organization’s report on Tourism and Poverty Alleviation
published for the World Summit on Sustainable Development in Johannesburg
in 2002 drew substantially on the work of the Pro-Poor Tourism Partnership
www.propoortourism.org.uk and there are now a range of initiatives taking
place on pro-poor tourism.
An Agenda for Change?
Discussion focussed on what could be done to further the local economic
development agenda at the inception and development phase by investors
and developers, the role of hoteliers and that of tour operators. In each of
these tourism sectors the significance of Socially Responsible Investment has
a differential impact depending upon the extent to which there is perceived
commercial advantage.
The following points illustrate the general consensus of the delegates; specific
areas of concern and opportunity are addressed subsequent to this.
• There was general agreement about the importance of facilitating local
community access to the tourism market (comprising tourists and the
tourism industry locally) in order to maximise linkages and minimise
leakages.
• Support for strategies which assist the development of local capacity to
realise these opportunities.
• Developers and financiers, hoteliers and tour operators can all act to create
those opportunities to assist local communities to benefit from them.
• The importance of measuring and demonstrating impacts on local economic
development and the reduction of poverty was emphasised, it is time to
move beyond statements of general principles and to measure and report
the impacts of initiatives in specific terms.
• It is time to move from pilot projects and experiments to programmes of
action.
• Scalability is the current challenge. How do we take what we know about
how to enhance the impact of tourism on local economic development and
the reduction of poverty and implement it at the destination to make real
change?
What is Pro-Poor Tourism?
Pro-poor tourism is not a specific
tourism product; it is an approach
to tourism development and
management which ensures that
local poor people are able to
secure economic benefits from
tourism in a fair and sustainable
manner.
Pro-poor tourism may improve
the livelihoods of poor people in
three main ways:
1. Economic gain through
employment and microenterprise development;
2. Infrastructure gains: roads,
water, electricity,
telecommunications, waste
treatment;
3. Empowerment through
engagement in decision
making.
The language of pro-poor tourism
is being used widely and there is
now an emerging consensus that
it is important to move beyond
general talk about “trickledown”
and multipliers and to focus on
measurable impacts on improving
the livelihoods of poor people.
In summary, traditional views of
growth in the tourism sector need
to be accompanied by a focus on
generating economic benefi ts for
poor people in destinations.4 Tourism and Local Economic Development
THE ROLE OF THE GOVERNMENT
Whilst the role of government was not the focus a number of issues were raised:
• Establishing a ‘whole government’ agenda for tourism development is rarely achieved; this applies both between
departments at national level and between national and local government.
• How can other departments of government be engaged
in the issues of tourism development? Ministries of
Tourism are o en seen as junior players in government �
and it can be very difficult to engage ministries of
finance, trade and industry in cross government efforts
to harness tourism for development.
• Tourism is o en seen as an industry which benefits �
elites. When people look at the industry they see
hoteliers and tour operators, they see wealth. How
do we raise awareness in government, and amongst
national decision makers in other sectors, about the
contribution which tourism makes to local livelihoods
and engage them in joint initiatives to increase the
local economic development and poverty reduction
impacts?
• If pro-poor growth and poverty reduction through tourism is to become part of national strategy then it is essential
to engage other national government ministries. This requires that the positive impacts on the local and national
economy and in particular success in achieving poverty reduction targets can be convincingly demonstrated,
measured and reported.
• Tourism is mentioned in some national Poverty Reduction Strategy Papers (PRSPs) but there is li le referencing �
between national tourism policy and the poverty reduction strategies.
THE BUSINESS CASE FOR ENGAGEMENT WITH LOCAL ECONOMIC
DEVELOPMENT AND POVERTY REDUCTION
To prosper the tourism industry needs to operate in environments which remain a ractive to� tourists. The industry
needs a relatively well-educated work force, functioning health systems and relatively good transport, communications,
water and energy infrastructure. These services and facilities are also valuable to local communities.
There are risks and opportunities in the tourism sector which financiers, developers, hoteliers and operators need to
manage. Many of those present felt that tourism does not have to do very much to have a significant impact on household
incomes and livelihoods in a local area. This can amount to a significant national impact if the tourism industry as a
whole adopted international best practice.
There is an increasingly strong business case for the investors and developers, hoteliers and resort owners and tour
operators to address these issues. The trend towards higher expectations of Corporate Responsibility (CR) performance
from increasing numbers of consumers and investors will not pass the travel and tourism industry by.
The ways that businesses do their business will determine the extent to which they contribute to the generation of local
economic development and the reduction of poverty. Where businesses act together they are able to reduce transaction
costs and secure more significant impacts than they would be able to achieve individually and improve the business
environment; by adopting common standards across a shared platform, with appropriate compliance guidelines and
verification, they can ensure a relatively level playing field and reduce the risk of legislation and regulatory intervention
by national or local authorities.5
Tourism and Local Economic Development
Minimising Risk
Business has been using tools to manage
environmental risk for some time. There is now
increasing emphasis on the economic and social
aspects of the triple bo om line of business. Brand �
image and value are key elements for an industry
where the product is intangible at the point of
purchase and where the experience is much more than
the directly purchased transport, accommodation
and guide services. Reputational risk is a significant
issue in an industry that is highly competitive and
differentiated; and where the product purchased by
the consumer extends beyond what is owned and
directly managed in the supply chain.
Licence to Operate
Good relationships with local communities, positive
recognition of demonstrable concern for the natural
and cultural environment and the maximisation of
the contribution which the industry makes to local
livelihoods, economic development and the reduction
of poverty are all important to the industry’s licence
to operate. Enterprises, particularly where they
collaborate to achieve local economic development,
can improve the general environment for business
and enable them to stay ahead of legislation.
Resentful communities can make it significantly
more expensive for the industry to operate and
reduce the quality of the experience.
Market Advantage
Extending responsible business practices beyond
the environmental agenda to address the economic
and social aspects builds reputation, particularly for
those companies that establish a leadership role. The
market is changing to reflect socially, environmentally
and culturally aware holidaymakers. These market
trends require a richer experience, generally beyond
the confines of the hotel or resort. There is market
advantage and repeat business to be secured by
enabling clients to enrich their experience and this
will increase the local economic benefit.
Product Quality and Cost
In an increasingly differentiated and competitive
market there is commercial advantage in operating
in, and to, destinations which offer a rich mixture
of experiences and activities. The traditional
provision of resort activities increasingly needs to
be supplemented with complementary products
many of which will be locally owned and provided
by SMEs. Businesses benefit where collectively
their efforts create a larger range of opportunities
for local sourcing and a larger pool of labour with
appropriate skills from which they can recruit. Cooperation between businesses makes the strategy
easier to achieve, reduces cost and avoids the
freeloader problem.
Staff Morale
Changing consumer a itudes towards what �
constitutes a good holiday experiences and the
relevance of the CR agenda also applies to staff.
Adopting a more responsible business agenda can
assist with the recruitment, motivation and retention
of quality staff and reduce costs.
Benefits of a CR Approach to Stimulating Local Economic Development6 Tourism and Local Economic Development
Many leading commercial banks
have adopted the Equator Principles
which are intended to provide a
common framework (benchmarked
against World Bank group criteria) for
commercial lenders. It is intended that
the Equator Principles should become
an important element of lender due
diligence and borrower compliance
and that the principles will become
part of the project management
process and extend over the lifecycle
of a development.
The benefits for developers, seeking
commercial finance, of compliance
with the Equator Principles may be
expected to include more favourable
repayment terms and less intrusive
covenants in loan agreements as
banks lend more selectively in order to
minimise their risk. For investors and
financial institutions the issues of risk
management are no less significant,
the repayment of, and return on,
their investments is dependent upon
the licence to operate, successful risk
management and market advantage of
the borrower. By adopting a proactive
approach through the Equator
Principles they can manage portfolio
volatility and increase returns.
Where developers and investors are
proactive in minimising negative
environmental, social and economic
impacts and maximising the positive
impacts they have a competitive
advantage in securing planning
permissions or licenses and in bidding
for development contracts.
Different considerations apply in
the design and construction phases
and in the operational phases of
a project. Developers are likely to
focus on securing construction and
development contracts and financial
institutions are o en partners in �
this process. Their joint focus is on
the development and construction
phase, but as hoteliers point out,
their capacity to adopt a CR approach
in the operational phase is, to a
significant degree, dependent upon
decisions made in siting, design
and construction. Hotel and resort
management companies o en �
have li le or no influence at that �
stage and subsequent retrofi ing to �
comply with regulatory frameworks,
insurance requirements and industry
best practices, as they develop over
the lifecycle of the development, is
expensive. Risk needs to be managed
over the project lifecycle as a whole.
The licence to operate, risk
management and commercial
advantage are key considerations for
developers and their funders. The
International Finance Corporation has
developed Tourism and Hospitality
Development guidelines which apply
to developments which it finances.
Whilst the agenda has been
dominated by risk management
there are commercial advantages for
developers, construction companies
and banks. In winning licenses
and construction contracts there is
commercial advantage in being able
to demonstrate not just low levels
of negative environmental and
socio-cultural impacts but enhanced
positive economic and social impacts.
This can be achieved through the
creation of additional employment
and SME opportunities for local
communities by adopting strategies
and development plans maximizing
the local economic development and
poverty impacts whilst minimizing
negative livelihood impacts.
The additional investment and
partnering, mentoring and
transaction costs associated with a
broader approach to local economic
development are likely to be small
in comparison to the commercial
advantage which comes from
enhancing the economic impacts,
particularly in countries with high
INVESTORS AND DEVELOPERS
Risk management has focussed primarily on the environment in
hotel construction but there are significant social and economic
risks that are increasingly the focus of community, NGO, IGO
and national and local government concerns.
levels of youth unemployment. By
engaging with local communities
in tourism development projects
and demonstrating both willingness
and acumen in maximising the local
economic benefits developers secure
their licence to operate and create
a be er business environment for �
the hotel and resort management
companies, with a richer product offer
in the neighbourhood.
Local sourcing and maintenance
requires the development of a range
of local enterprises which will benefit
the development and the local
economy by providing employment,
local enterprise opportunities and
supplies of goods and services which
benefit the local community as well
as the tourism development. The
development of this strategy requires
that both local sourcing and market
access issues are addressed in the
design and development phases.
If the approach is to be credible the
local economic benefits need to be
clearly specified, targets need to be
set and the deliverables monitored.
Processes like community labour
agreements and established economic
impact measurements including the
measurement of local sourcing and job
creation can be used for this purpose.
Local communities can o en, but not �
always, gain from the infrastructure
that comes to their area as a result
of tourism development. Companies
will increasingly be challenged to
report on these benefits – all of which
contribute to risk management and
ensuring the licence to operate.
“The licence to operate, risk management and commercial advantage are key considerations for developers and their funders.”7
Tourism and Local Economic Development
Risk management and the licence
to operate require that hotels and
resorts maintain good relationships
with their “neighbourhood” and
return a profit to the owners. The
hotel sector moved earlier than other
travel and tourism industry sectors to
adopt and implement environmental
management principles and there are
many examples of local initiatives
around hotels and resorts that
are designed to address issues of
economic and social sustainability.
The experiments and local initiatives
need now to be scaled up and applied
more widely.
Hotels and resorts are to a significant
degree dependent upon the
maintenance and development of the
environment in which they operate.
Hotels and reports have an obvious and
real interest in their neighbourhood
for risk management and product
quality reasons – the hotel or resort is
commi ed to the local area, it cannot �
just move on if the environment is
ruined or the neighbourhood becomes
una ractive. �
The managers of hotels and resorts
have a long-term interest in the
maintenance and enrichment of
the locality, to “create be er places �
for people to live in and for people
to visit.” If the destination value
declines so, generally, does the value
and profitability of the property;
contributing to the development of the
destination enables the hotel or resort
to manage risk, increase product
quality and secure commercial
advantage. There are direct
commercial benefits in extending the
season, increasing bed occupancy,
filling beds out of season through a
festival and extending length of stay.
Improving the destination can assist
in achieving all of these commercial
objectives.
Hotels and resorts can achieve a
considerable amount by acting
separately, however, destinations
are o en composed by a variety �
of properties serving different
market segments and with different
management strategies and the sector
is very vulnerable to those who whilst
they benefit from initiatives do not
contribute to them. At the destination
level there are benefits from
collaborative action by hotels and
resorts working with local authorities
and communities and with the wider
local industry.
Local Sourcing
Local economic development and
the reduction of poverty is achieved
where hotels and resorts:
• maximise their employment
of local labour and through
management and training
interventions, by investing
in people and ensuring that
increasingly senior posts go to
local employees;
• work with local communities
and micro enterprises to ensure
supplies of food and beverages,
so furnishings, maintenance, �
arts and cra s and entertainment. �
are locally sourced.
The development of local linkages of
these sorts requires that the challenges
of quality, quantity and continuity of
supply at a fair market price are met.
Complementary Products
• Hotels and resorts can contribute
and secure commercial
advantage by working with
local communities and SMEs
to encourage the development
of the diversity of local tourism
services and products.
• Hotels and resorts can contribute
to this destination enrichment
by providing market access for
the communities and microenterprises that can provide these
goods and services. Commercial
advantage and risk management
favour cooperation.
• In adopting these approaches
the hotel or resort is encouraging
their clients to spend money
in the local economy on
complementary products
by providing market access.
Traditionally hotels and resorts
have done this by entering
into contracts with the local
formal sector industry. There
is commercial advantage to be
gained by widening the range of
goods and services available to
guests and in the process a far
more significant contribution can
be made to the local economy by
enhancing market access.
HOTELS AND RESORTS 8 Tourism and Local Economic Development
TOUR OPERATORS
Although some tour operators
specialise in particular destinations,
the majority of operators, including
the specialists, are multi-destination.
Tour operators have established
relationships with local suppliers;
particularly their inbound operator
in the destination. Their ability to sell
trips is very reliant upon the perceived,
and actual quality, of the destination.
Tour operators are reliant on the
quality and safety of the destination,
they also play a significant role in
shaping the way the destination
is perceived by the way that they
market the location. Many operators
are responding to changing market
trends in the UK by placing increasing
emphasis on locally sourced services,
food and drinks, richer excursion and
activity programmes.
Tour operators seek market advantage through the quality of the
experiences which they offer and that o en necessitates close �
engagement with local communities and micro enterprises. Increasing
numbers of operators are seeking to secure repeat business by
enhancing the quality of the holiday experience in these ways and
securing both increased levels of repeat business and referrals.
Where investors and developers, hotel and resort management
companies and managers and tour operators can identify ways of
working together to enhance the quality of the destination, they and
the local community gain.
© The International Centre for Responsible Tourism (Dr Harold Goodwin) and Scott Wilson Business Consultancy (Stuart Robson and Sam Higton), August 2004.
All rights reserved. No part of this publication may be reproduced without the written permission of the copyright owners. Authors welcome the distribution
and use of this document in original format by business organisations, Government and Educational establishments.
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Economic impacts of Tourism Page # 1
Economic Impacts of Tourism
Daniel J. Stynes
Businesses and public organizations are increasingly interested in the economic impacts of tourism at
national, state, and local levels. One regularly hears claims that tourism supports X jobs in an area or that a festival
or special event generated Y million dollars in sales or income in a community. “Multiplier effects” are often cited
to capture secondary effects of tourism spending and show the wide range of sectors in a community that may
benefit from tourism.
Tourism’s economic benefits are touted by the industry for a variety of reasons. Claims of tourism’s
economic significance give the industry greater respect among the business community, public officials, and the
public in general. This often translates into decisions or public policies that are favorable to tourism. Community
support is important for tourism, as it is an activity that affects the entire community. Tourism businesses depend
extensively on each other as well as on other businesses, government and residents of the local community.
Economic benefits and costs of tourism reach virtually everyone in the region in one way or another. Economic
impact analyses provide tangible estimates of these economic interdependencies and a better understanding of the
role and importance of tourism in a region’s economy.
Tourism activity also involves economic costs, including the direct costs incurred by tourism businesses,
government costs for infrastructure to better serve tourists, as well as congestion and related costs borne by
individuals in the community. Community decisions over tourism often involve debates between industry
proponents touting tourism’s economic impacts (benefits) and detractors emphasizing tourism’s costs. Sound
decisions rest on a balanced and objective assessment of both benefits and costs and an understanding of who
benefits from tourism and who pays for it.
Tourism’s economic impacts are therefore an important consideration in state, regional and community
planning and economic development. Economic impacts are also important factors in marketing and management
decisions. Communities therefore need to understand the relative importance of tourism to their region, including
tourism’s contribution to economic activity in the area.
A variety of methods, ranging from pure guesswork to complex mathematical models, are used to
estimate tourism’s economic impacts. Studies vary extensively in quality and accuracy, as well as which aspects of
tourism are included. Technical reports often are filled with economic terms and methods that non-economists do
not understand. On the other hand, media coverage of these studies tend to oversimplify and frequently
misinterpret the results, leaving decision makers and the general public with a sometimes distorted and incomplete
understanding of tourism’s economic effects.
How can the average person understand these studies sufficiently to separate good studies from bad ones
and make informed choices? The purpose of this bulletin is to present a systematic introduction to economic impact
concepts and methods. The presentation is written for tourism industry analysts and public officials, who would
like to better understand, evaluate, or possibly conduct an economic impact assessment. The bulletin is organized
around ten basic questions that either are asked or should be asked about the economic impacts of tourism.
Ten Questions About the Economic Impacts of Tourism
1. What is an economic impact analysis?
2. What questions does an economic impact assessment answer?
3. What economic impacts does tourism have?
4. What are multiplier effects?
5. How are tourism’s economic impacts measured?
6. What are the typical approaches for an economic impact assessment?
7. What are some examples of economic impact assessment approaches in tourism?
8. What are the steps for conducting a tourism economic impact study?
9. What are some questions to ask when evaluating or interpreting a tourism economic impact study?
10. What will an economic impact study cost?Economic impacts of Tourism Page # 2
1. What is an economic impact analysis?
A variety of economic analyses are carried out to support tourism decisions. As these different kinds of
economic analysis are frequently confused, let’s begin by positioning economic impact studies within the
broader set of economic problems and techniques relevant to tourism. These same techniques may be applied
to any policy or action, but we will define them here in the context of tourism. Each type of analysis is
identified by the basic question(s) it answers and the types of methods and models that are appropriate.
TYPES OF ECONOMIC ANALYSIS
Economic impact analysis -- What is the contribution of tourism activity to the economy of the region? An
economic impact analysis traces the flows of spending associated with tourism activity in a region to
identify changes in sales, tax revenues, income, and jobs due to tourism activity. The principal methods
here are visitor spending surveys, analysis of secondary data from government economic statistics,
economic base models, input-output models and multipliers. (Frechtling 1994a)
Fiscal impact analysis – Will government revenues from tourism activity from taxes, direct fees, and other
sources cover the added costs for infrastructure and government services? Fiscal impact analysis
identifies changes in demands for government utilities and services resulting from some action and
estimates the revenues and costs to local government to provide these services (Burchell and Listokin
1978).
Financial analysis – Can we make a profit from this activity? A financial analysis determines whether a
business will generate sufficient revenues to cover its costs and make a reasonable profit. It generally
includes a short-term analysis of the availability and costs of start-up capital as well as a longer-range
analysis of debt service, operating costs and revenues. A financial analysis for a private business is
analogous to a fiscal impact analysis for a local government unit.
Demand analysis – How will the number or types of tourists to the area change due to changes in prices,
promotion, competition, quality and quantity of facilities, or other demand shifters? A demand
analysis estimates or predicts the number and/or types of visitors to an area via a use estimation, forecasting
or demand model. The number of visitors or sales is generally predicted based on judgement (Delphi
method), historic trends (time series methods), or using a model that captures how visits or spending varies
with key demand determinants (structural models) such as population size, distance to markets, income
levels, and measures of quality & competition (Walsh 1986, Johnson and Thomas 1992).
Benefit Cost analysis (B/C) – Which alternative policy will generate the highest net benefit to society over
time? A B/C analysis estimates the relative economic efficiency of alternative policies by comparing
benefits and costs over time. B/C analysis identifies the most efficient policies from the perspective of
societal welfare, generally including both monetary and non-monetary values. B/C analysis makes use of a
wide range of methods for estimating values of non-market goods and services, such as the travel cost
method and contingent valuation method (Stokey and Zeckhauser 1978; Sudgen and Williams 1978 ).
Feasibility study – Can/should this project or policy be undertaken? A feasibility study determines the
feasibility of undertaking a given action to include political, physical, social, and economic feasibility. The
economic aspects of a feasibility study typically involve a financial analysis to determine financial
feasibility and a market demand analysis to determine market feasibility. A feasibility study is the private
sector analogue of benefit cost analysis. The feasibility study focuses largely on the benefits and costs to the
individual business or organization, while B/C analysis looks at benefits and costs to society more generally
(Warnell 1986).
Environmental Impact assessment – What are the impacts of an action on the surrounding environment? An
environmental assessment determines the impacts of a proposed action on the environment, generally
including changes in social, cultural, economic, biological, physical, and ecological systems. Economic
impact assessment methods are often used along with corresponding measures and models for assessing
social, cultural and environmental impacts. Methods range from simple checklists to elaborate simulation
models (Williams, 1994).Economic impacts of Tourism Page # 3
Benefit cost analysis and economic impact analysis are frequently confused as both discuss economic
"benefits". There are two clear distinctions between the two techniques. B/C analysis addresses the benefits from
economic efficiency while economic impact analysis focuses on the regional distribution of economic activity. The
income received from tourism by a destination region is largely off-set by corresponding losses in the origin
regions, yielding only modest contributions to net social welfare and efficiency. B/C analysis includes both market
and non-market values (consumer surplus), while economic impact analysis is restricted to actual flows of money
from market transactions.
While each type of economic analysis is somewhat distinct, a given problem often calls for several
different kinds of economic analysis. An economic impact study will frequently involve a demand analysis to
project levels of tourism activity. In other cases demand is treated as exogenous and the analysis simply estimates
impacts if a given number of visitors are attracted to the area. A comprehensive impact assessment will also
examine fiscal impacts, as well as social and environmental impacts.
Be aware that an economic impact analysis, by itself, provides a rather narrow and often one-sided
perspective on the impacts of tourism. Studies of the economic impacts of tourism tend to emphasize the positive
benefits of tourism. On the other hand environmental, social, cultural and fiscal impact studies tend to focus more
on negative impacts of tourism. This is in spite of the fact that there are negative economic impacts of tourism
(e.g., seasonality and lower wage jobs) and in many cases positive environmental and social impacts (e.g.,
protection of natural & cultural resources in the area and education of both tourists and local residents).
An economic impact assessment (EIA) traces changes in economic activity resulting from some action.
An EIA will identify which economic sectors benefit from tourism and estimate resulting changes in income and
employment in the region. Economic impact assessment procedures do not assess economic efficiency and also do
not generally produce estimates of the fiscal costs of an action. For many problems economic impact analysis will
be part of a broader analysis. Environmental, social, and fiscal impacts are often equally important concerns in a
balanced assessment of impacts.
2. What questions does a tourism economic impact study answer?
An economic impact analysis will assess the contribution of tourism activity to a region’s economy. The
basic questions an economic impact study usually addresses are:
· How much do tourists spend in the area?
· What portion of sales by local businesses is due to tourism?
· How much income does tourism generate for households and businesses in the area?
· How many jobs in the area does tourism support?
· How much tax revenue is generated from tourism?
An economic impact analysis also reveals the interrelationships among economic sectors and provides
estimates of the changes that take place in an economy due to some existing or proposed action. The most common
applications of economic impact analysis to tourism are:
· To evaluate the economic impacts of changes in the supply of recreation and tourism opportunities.
Supply changes may involve a change in quantity, such as the opening of new facilities, closing of
existing ones, or expansions and contraction in capacity. Supply changes may also involve changes in
quality, including changes in (a) the quality of the environment, (b) the local infrastructure and public
services to support tourism, or (c) the nature of the tourism products and services that are provided in
an area.
· To evaluate the economic impacts of changes in tourism demand. Population changes, changes in the
competitive position of the region, marketing activity or changing consumer tastes and preferencesEconomic impacts of Tourism Page # 4
can alter levels of tourism activity, spending, and associated economic activity. An economic impact
study can estimate the magnitude and nature of these impacts.
· To evaluate the effects of policies and actions which affect tourism activity either directly or
indirectly. Tourism depends on many factors at both origins and destinations that are frequently
outside the direct control of the tourism industry itself. Economic impact studies provide information
to help decision makers better understand the consequences of various actions on the tourism industry
as well as on other sectors of the economy. For example, increased air pollution standards have been
opposed in some regions due to the predicted economic consequences of the closing of plants that
cannot meet the new standards. Tourism interests counter these arguments with estimates of the
potential gains in income and jobs in tourism industries that depend on good air quality and visibility.
· To understand the economic structure and interdependencies of different sectors of the economy.
Economic studies help us better understand the size and structure of the tourism industry in a given
region and its linkages to other sectors of the economy. Such understandings are helpful in
identifying potential partners for the tourism industry as well as in targeting industries as part of
regional economic development strategies. Issues such as economic growth, stability, and seasonality
may be addressed as part of these studies.
· To argue for favorable treatment in allocation of resources or local tax, zoning or other policy
decisions. By showing that tourism has significant economic impacts, tourism interests can often
convince decision-makers to allocate more resources for tourism or to establish policies that
encourage tourism. Tax abatements and other incentives frequently given to manufacturing firms
have also been granted to hotels, marinas and other tourism businesses based on demonstrated
economic impacts in the local area.
· To compare the economic impacts of alternative resource allocation, policy, management or
development proposals. Economic impact analyses are commonly used to assess the relative merits of
distinct alternatives. The economic contribution of expanded tourism offerings may be compared for
example with alternatives such as resource extraction activities (mining, timber harvesting) or
manufacturing. Impacts of alternative tourism development proposals may also be evaluated, e.g.,
tourism strategies that emphasize outdoor recreation, camping development, a convention facility, or
a factory outlet mall.
3. What economic impacts does tourism have?
Tourism has a variety of economic impacts. Tourists contribute to sales, profits, jobs, tax revenues, and
income in an area. The most direct effects occur within the primary tourism sectors --lodging, restaurants,
transportation, amusements, and retail trade . Through secondary effects, tourism affects most sectors of the
economy. An economic impact analysis of tourism activity normally focuses on changes in sales, income, and
employment in a region resulting from tourism activity.
A simple tourism impact scenario illustrates. Let’s say a region attracts an additional 100 tourists, each
spending $100 per day. That’s $10,000 in new spending per day in the area. If sustained over a 100 day season, the
region would accumulate a million dollars in new sales. The million dollars in spending would be distributed to
lodging, restaurant, amusement and retail trade sectors in proportion to how the visitor spends the $100. Perhaps
30% of the million dollars would leak out of the region immediately to cover the costs of goods purchased by
tourists that are not made in the local area (only the retail margins for such items should normally be included as
direct sales effects). The remaining $700,000 in direct sales might yield $350,000 in income within tourism
industries and support 20 direct tourism jobs. Tourism industries are labor and income intensive, translating a high
proportion of sales into income and corresponding jobs.Economic impacts of Tourism Page # 5
The tourism industry, in turn, buys goods and services from other businesses in the area, and pays out
most of the $350,000 in income as wages and salaries to its employees. This creates secondary economic effects in
the region. The study might use a sales multiplier of 2.0 to indicate that each dollar of direct sales generates
another dollar in secondary sales in this region. Through multiplier effects, the $700,000 in direct sales produces
$1.4 million in total sales. These secondary sales create additional income and employment, resulting in a total
impact on the region of $1.4 million in sales, $650,000 in income and 35 jobs. While hypothetical, the numbers
used here are fairly typical of what one might find in a tourism economic impact study. A more complete study
might identify which sectors receive the direct and secondary effects and possibly identify differences in spending
and impacts of distinct subgroups of tourists (market segments). One can also estimate the tax effects of this
spending by applying local tax rates to the appropriate changes in sales or income. Instead of focusing on visitor
spending, one could also estimate impacts of construction or government activity associated with tourism.
There are several other categories of economic impacts that are not typically covered in economic impact
assessments, at least not directly. For example:
· Changes in prices -- tourism can sometimes inflate the cost of housing and retail prices in the area,
frequently on a seasonal basis.
· Changes in the quality and quantity of goods and services – tourism may lead to a wider array of
goods and services available in an area (of either higher or lower quality than without tourism).
· Changes in property and other taxes – taxes to cover the cost of local services may be higher or
lower in the presence of tourism activity. In some cases, taxes collected directly or indirectly from
tourists may yield reduced local taxes for schools, roads, etc. In other cases, locals may be taxed
more heavily to cover the added infrastructure and service costs. The impacts of tourism on local
government costs and revenues are addressed more fully in a fiscal impact analysis.
· Economic dimensions of “social” and “environmental” impacts - There are also economic
consequences of most social and environmental impacts that are not usually addressed in an
economic impact analysis. These can be positive or negative. For example, traffic congestion will
increase costs of moving around for both households and businesses. Improved amenities that attract
tourists may also encourage retirees or other kinds of businesses to locate in the area.
Direct, Indirect and Induced Effects
A standard economic impact analysis traces flows of money from tourism spending, first to businesses and
government agencies where tourists spend their money and then to :
· other businesses -- supplying goods and services to tourist businesses,
· households – earning income by working in tourism or supporting industries, and
· government -- through various taxes and charges on tourists, businesses and households
Formally, regional economists distinguish direct, indirect, and induced economic effects. Indirect and
induced effects are sometimes collectively called secondary effects. The total economic impact of tourism is the
sum of direct, indirect, and induced effects within a region. Any of these impacts may be measured as gross output
or sales, income, employment, or value added. See the glossary for definitions of these terms.
Direct effects are production changes associated with the immediate effects of changes in tourism .
expenditures. For example, an increase in the number of tourists staying overnight in hotels would directly yield
increased sales in the hotel sector. The additional hotel sales and associated changes in hotel payments for wages
and salaries, taxes, and supplies and services are direct effects of the tourist spending.
Indirect effects are the production changes resulting from various rounds of re-spending of the hotel
industry's receipts in other backward-linked industries (i.e., industries supplying products and services to hotels).
Changes in sales, jobs, and income in the linen supply industry, for example, represent indirect effects of changes
in hotel sales. Businesses supplying products and services to the linen supply industry represent another round of
indirect effects, eventually linking hotels to varying degrees to many other economic sectors in the region.Economic impacts of Tourism Page # 6
Induced effects are the changes in economic activity resulting from household spending of income earned
directly or indirectly as a result of tourism spending. For example, hotel and linen supply employees, supported
directly or indirectly by tourism, spend their income in the local region for housing, food, transportation, and the
usual array of household product and service needs. The sales, income, and jobs that result from household
spending of added wage, salary, or proprietor’s income are induced effects.
By means of indirect and induced effects, changes in tourist spending can impact virtually every sector of
the economy in one way or another. The magnitude of secondary effects depends on the propensity of businesses
and households in the region to purchase goods and services from local suppliers. Induced effects are particularly
noticed when a large employer in a region closes a plant. Not only are supporting industries (indirect effects) hurt,
but the entire local economy suffers due to the reduction in household income within the region. Retail stores close
and leakages of money from the region increase as consumers go outside the region for more and more goods and
services. Similar effects in the opposite direction are observed when there is a significant increase in jobs and
household income.
Final demand is the term used by economists for sales to the final consumers of goods and services. In
almost all cases, the final consumers of tourism goods and services are households. Government spending is also
considered as final demand. The same methods for estimating impacts of visitor spending can be applied to
estimate the economic impacts of government spending, for example, to operate and maintain a park or visitor
center.
Regional economic models
An input-output model (I-O model) is a mathematical model that describes the flows of money between
sectors within a region’s economy. Flows are predicted by knowing what each industry must buy from every other
industry to produce a dollar’s worth of output. Using each industry’s production function, I-O models also
determine the proportions of sales that go to wage and salary income, proprietor’s income, and taxes. Multipliers
can be estimated from input-output models based on the estimated re-circulation of spending within the region.
Exports and imports are determined based upon estimates of the propensity of households and firms within the
region to purchase goods and services from local sources (often called RPC’s or regional purchase coefficients).
The more a region is self-sufficient and purchases goods and services from within the region, the higher the
multipliers for the region.
Input-output models make a number of assumptions. The basic ones are that:
· All firms in a given industry employ the same production technology (usually assumed to be the national
average for that industry), and produce identical products.
· There are no economies or diseconomies of scale in production or factor substitution. I-O models are
essentially linear –- double the level of tourism activity/production and you double all of the inputs, the
number of jobs, etc.
· The model doesn’t explicitly keep track of time, but analysts generally report the impact estimates as if
they represent activity within a single year.
· One must assume that the various model parameters are accurate and represent the current year.
I-O models are firmly grounded in the national system of accounts, which relies on a standard industrial
classification system (SIC codes) and various federal government economic censuses, in which individual
firms report sales, wage and salary payments and employment. I-O models will generally be at least a few
years out-of-date, although this isn’t usually a major problem unless the region’s economy has changed
significantly. An I-O model represents the region’s economy at a particular point in time. Tourist
spending estimates are generally price adjusted to the year of the model.
· Multiplier computations for induced effects generally assume that jobs created by additional spending are
new jobs, involving new households in the area. Induced effects are computed assuming linear changes in
household spending with changes in income. Estimates of induced effects may be inflated due to the
violation of these assumptions. Induced effects tend to account for the vast majority of the secondary
effects of tourism, and therefore should be used with caution.Economic impacts of Tourism Page # 7
4. What are multipliers and multiplier effects of tourism?
Multipliers capture the secondary economic effects (indirect and induced) of tourism activity. Multipliers
have been frequently misused and misinterpreted in tourism studies (Archer 1984) and are a considerable source of
confusion among non-economists. Multipliers represent the economic interdependencies between sectors within a
particular region’s economy. They vary considerably from region to region and sector to sector. There are many
different kinds of multipliers reflecting which secondary effects are included and which measure of economic
activity is used (sales, income, or employment).
For example,
The Type I sales multiplier = direct sales + indirect sales
direct sales.
The Type II or III sales multiplier
1
= direct sales + indirect sales + induced sales
direct sales.
Multiplying a Type I sales multiplier times the direct sales gives direct plus indirect sales. Multiplying a
Type II or III sales multiplier times the direct sales gives total sales impacts including direct, indirect and induced
effects. The multipliers defined above are called ratio type multipliers as they measure the ratio of a total impact
measure to the corresponding direct impact. Comparable income and employment ratio type multipliers may be
defined by replacing sales with measures of income or employment in the above equations. Ratio multipliers should
be used with caution.
A common error is to multiply a sales multiplier times tourist spending to get total sales effects. This will
generate an inflated estimate of tourism impacts. The problem is that tourism spending or sales is not exactly the
same as the “direct effects”, appearing in the multiplier formula. Tourist purchases of goods (vs. services) are the
primary source of the problem.
To properly apply tourist purchases of goods to an input-output model (or corresponding multipliers),
various margins (retail, wholesale and transportation) must be deducted from the “purchaser price” of the good to
separate out the “producer price”. In an I-O model, retail margins accrue to the retail trade sector, wholesale
margins to wholesale trade, transportation margins to transportation sectors (trucking, rail, air etc.) and the
producer prices of goods are assigned to the sector that produces the good.
In most cases the factory that produces the good bought by a tourist lies outside of the local region,
creating an immediate “leakage” in the first round of spending and therefore no local impact from production of
the good. Before applying a multiplier to tourist spending, one must first deduct the producer prices of all imported
goods that tourists buy (i.e. only include the local retail margins and possibly wholesale and transportation margins
if these firms lie within the region). Generally, only 60 to 70% of tourist spending appears as final demand in a
local region. While all tourist purchases of services will accrue to the local region as final demand , only the
margins on goods purchased at retail stores should be counted as local final demand. The ratio of local final
demand to tourist spending is called the capture rate.
Capture rate = local final demand / tourism spending in local area
1
. The distinction between Type II and Type III multipliers involves a technical difference in how the induced
effects are computed. Type II approaches include households as a sector of the economy and invert the technical
coefficient matrix including the household sector, while Type III approaches treat households as exogenous.Economic impacts of Tourism Page # 8
Capture rates, like multipliers, will vary with the size and nature of the region as well as the kind of tourist
spending included. One must therefore be cautious in taking a multiplier or capture rate cited in one study and
using it in another.
Another way of calculating a multiplier (generally the preferred approach among economists) is as a ratio
of income or employment to sales. This kind of multiplier is sometimes called a Keynesian multiplier or response
coefficient.
Type III Income multiplier = Total direct, indirect, and induced income
direct sales
Type III Employment multiplier = Total direct, indirect, and induced employment
direct sales
This income (employment) multiplier produces total income (employment) impacts when multiplied by the direct
sales. One must still be careful in distinguishing between tourism spending/sales and direct sales effects. Some
studies may embed the capture rate in the multiplier, expressing the ratio in terms of tourism spending rather than
direct sales.
5. How are tourism’s economic impacts measured?
The economic impacts of tourism are typically estimated by some variation of the following simple
formula:
Economic Impact of Tourism = Number of Tourists * Average Spending per Visitor * Multiplier
The formula suggests three distinct steps and corresponding measurements or models:
(1) Estimate the change in the number and types of tourists to the region due to the proposed policy
or action.
Estimates or projections of tourist activity generally come from a demand model or some system for
measuring levels of tourism activity in an area. Economic impact estimates will rest heavily on good estimates of
the numbers and types of visitors. These must come from carefully designed measurements of tourist activity, a
good demand model, or good judgement. This step is usually the weakest link in most tourism impact studies, as
few regions have accurate counts of tourists, let alone good models for predicting changes in tourism activity or
separating local visitors from visitors from outside the region.
(2) Estimate average levels of spending (often within specific market segments) of tourists in the
local area.
Spending averages come from sample surveys or are sometimes borrowed or adapted from other studies.
Spending estimates must be based on a representative sample of the population of tourists taking into account
variations across seasons, types of tourists, and locations within the study area. As spending can vary widely across
different kinds of tourists, we recommend estimating average spending for a set of key tourist segments based on
samples of at least 50-100 visitors within each tourism segment. Segments should be defined to capture differences
in spending between local residents vs. tourists, day users vs. overnight visitors, type of accommodation (motel,Economic impacts of Tourism Page # 9
campground, seasonal home, with friends and relatives), and type of transportation (car, RV, air, rail, etc.). In
broadly based tourism impact studies, it is useful to identify unique spending patterns of important activity
segments such as downhill skiers, boaters, convention & business travelers.
Multiplying the number of tourists by the average spending per visitor (be careful the units are consistent)
gives an estimate of total tourist spending in the area. Estimates of tourist spending will generally be more accurate
if distinct spending profiles and use estimates are made for key tourism segments. The use and spending estimates
are the two most important parts of an economic impact assessment. When combined, they capture the amount of
money brought into the region by tourists. Multipliers are needed only if one is interested in the secondary effects
of tourism spending.
(3) Apply the change in spending to a regional economic model or set of multipliers to determine
secondary effects.
Secondary effects of tourism are estimated using multipliers or a model of the region’s economy.
Multipliers generally come from an economic base or input-output model of the region’s economy. In many cases
multipliers are borrowed (often improperly) or adjusted from published multipliers or other studies. One should not
take a multiplier estimated for one region and apply it in a region with a quite different economic structure.
Generally, multipliers are higher for larger regions with more diversified economies and lower for smaller regions
with more limited economic development. A common error is to apply a statewide multiplier (since these are more
widely published) to a local region. This will yield inflated estimates of local multiplier effects.
Multipliers can also be used to convert estimates of spending or sales to income and employment. Simple
ratios can be used to capture how much income or jobs are generated per dollar of sales. These ratios will vary
from region to region and across individual economic sectors due to the relative importance of labor inputs in each
industry and different wage and salary rates in different regions of the country. Be aware that job estimates are
generally not full time equivalents, making them difficult to compare across industries with different proportions of
seasonal and part time jobs. Income or value added
2
are generally the preferred measures of the contribution of
tourism to a region’s economy.
6. What are the typical approaches for an economic impact assessment?
At the simple, “quick and dirty” end of the spectrum are highly aggregate approaches that rely mostly on
judgement to determine tourism activity, spending and multipliers. Such estimates can be completed in a couple
hours at little cost and rest largely on the expertise and judgement of the analyst. At the other extreme are studies
that gather primary data from visitor spending studies and apply the spending estimates to formal regional
economic models for the area in question. In between are a wide range of options that employ varying degrees of
judgement, secondary data, primary data, and formal models.
Different levels of detail and corresponding expense (time and money) and accuracy are possible for each
of the three steps -- estimating tourist volume, spending, and multiplier effects. Four typical approaches illustrate
the levels of detail that are possible and the associated methods (see Table 1).
1. Subjective estimates that rely mostly on expert opinion
2. Secondary data in aggregate form, adapting existing estimates to suit the problem
3. Secondary data in disaggregate form, permitting finer adjustment of data to fit the situation
4. Primary data and/or formal models, usually involving visitor surveys and regional economic models.
2
Value added includes wage and salary income, proprietor’s income, rents, profits, and indirect business taxes. It is a common
measure of the net contribution of the industry or region to production (net of costs of the non-labor inputs).Economic impacts of Tourism Page # 10
Table 1. Approaches to Tourism Economic Impact Assessment
Level Tourism Activity Spending Multipliers
1-
Judgem
ent
Expert judgement to estimate
tourism activity
Expert judgement or an
“engineering approach”
3
Expert judgement to estimate
multipliers
2 Existing tourism counts for the
area or total estimates from a
similar area or facility
Use or adjust spending averages
from studies of a similar
area/market
Use or adjust aggregate tourism
spending multipliers from a
similar region/study
3 Estimate tourism activity by
segment or revise estimates by
segment from another area
Adjust spending that is
disaggregated within particular
spending categories & segments
Use sector-specific multipliers
from published sources
4-
Primary
data
Visitor survey to estimate
number of tourists by segment or
a demand model
Survey random sample of visitors
to estimate average spending by
segment & spending category
Use an input-output model of the
region’s economy
One can employ different levels of aggregation in visitor segments, spending categories, multipliers, and
economic sectors to finely tune the data and models to a particular application and also yield more detailed
information about the economic impacts. For example, spending data from previous surveys may be adjusted over
time using consumer price indices (CPI). If spending is itemized in several categories, distinct CPI’s may be used
for food away from home, lodging, or gasoline. If not, an aggregate CPI, which may not reflect the mix of goods
that tourists purchase, must be used. Data for distinct tourism market segments is also valuable in tailoring
secondary data to a particular application. For example, separate estimates of the average spending for day users
and overnight visitors allows one to adjust the spending estimate to reflect a given mix of day users and overnight
visitors.
7. What are some examples of economic impact studies in tourism?
Some examples serve to illustrate the range of possibilities for estimating the economic impacts of
tourism. The following three examples are presented in greater detail in a companion bulletin.
· The National Park Service’s “Money Generation Model “ is a simple fill-in-form for generating
economic impacts. While an extremely simple approach, it captures the essential elements, of an
economic impact analysis. The number of visits, average spending per visitor and an aggregate sales
multiplier are entered on a simple worksheet to generate estimates of the direct and total sales effects
of visitor spending. Sales effects are converted to income and jobs using simple ratios of income to
sales and jobs to sales. Tax effects of visitor spending can also be estimated by applying local tax rates
3
In an engineering approach, one estimates the costs of producing a “trip” by itemizing typical costs for each input - e.g., a
typical overnight visitor party of 4 staying two nights will incur $50 per night for motel room, $20 per person per day for meals,
$10 for half tank of gas, and $50 for souvenirs = total of $320 per party per trip.Economic impacts of Tourism Page # 11
to sales estimates. With sound judgement in choosing the parameters, the MGM model can yield
reasonable ballpark estimates of economic impacts at minimal cost. This approach, however, provides
little detail on spending categories or which sectors of the economy benefit from either direct or
secondary effects. The aggregate nature of the approach also makes it difficult to adjust recommended
spending rates or multipliers to different applications (USDI, National Park Service 1990.).
· The Bureau of Economic Analysis’s (BEA) RIMS II user handbook illustrates how to apply
published multipliers to estimate economic impacts. This approach starts with visitor spending (from
survey or secondary sources) divided into a number of spending categories and makes use of sectorspecific multipliers to estimate the direct and total sales, income and employment effects. Multipliers
from the BEA’s RIMS II models are used to estimate secondary effects. Multipliers are reported for
39 sectors for each state in the second edition of their report (USDC 1992). This method uses margins
to properly account for retail purchases of goods and makes use of disaggregate sector-specific
multipliers for each state. Multipliers for sub-state regions are not as readily available, but can be
acquired from BEA or other sources. Secondary effects cannot be disaggregated to individual sectors
using the BEA approach. (USDC, BEA 1992).
· The MI-REC/IMPLAN System. Stynes and Propst have developed a fairly complete microcomputer-based system for estimating economic impacts of recreation and tourism. The system
combines spreadsheets for estimating spending with the IMPLAN input-output modeling system.
IMPLAN uses county level data to estimate 528 sector input-output models for regions down to a
county level. IMPLAN generates a complete set of economic accounts for the region including
multipliers and trade flows. MI-REC spreadsheets estimate visitor spending within up to 33
categories based on the number and types of visitors attracted to an area. Spending is then bridged to
the IMPLAN model sectors to estimate direct, indirect and induced effects in terms of sales, income
and employment. Users may estimate spending via visitor surveys or use the MI-REC database of
spending profiles, compiled from previous studies. The system also includes price indices to easily
update spending data to a current year (Stynes and Propst 1992, 1996).
Two other systems for estimating economic impacts of tourism should be noted. The TEIM or Travel
Economic Impact Model developed by the U.S. Travel Data Center (USTDC, 1997) has been widely used to
estimate tourism and travel impacts at state and national levels. A more recent development is the satellite
accounting approach developed by the World Travel and Tourism Council (WTTC 1996). Both of these systems
are primarily designed for estimating the overall economic significance of tourism at national or state levels. They
are not readily applied to estimate the impacts of particular policies and actions at the local level.
The TEIM relies on national travel surveys to estimate trip volume and spending on a state-by-state basis.
Local estimates of impacts are obtained using simple allocation formulas to distribute statewide impacts to counties
and cities within the state. These local estimates do not account very well for the distinct types of tourism activity
or spending patterns in different sub-regions of a state. See Frechtling (1994b) for a summary of the TEIM model.
The WTTC effort also focuses on national and statewide accounting of tourism’s economic significance.
Their satellite tourism account identifies the contribution of travel and tourism to gross national product (GNP) or
gross state product (GSP). Using the standard national system of accounts, they identify the portion of sales, taxes
and investment attributable directly to travel and tourism. The WTTC system does not use multipliers or attempt to
estimate secondary effects. It does, however, capture a great deal of travel-related economic activity, not covered by
visitor trip spending, such as durable goods purchases (boats and RV’s), construction and investment in tourism,
and government expenditures.Economic impacts of Tourism Page # 12
8. What are the steps for conducting a tourism economic impact study?
An economic impact study involves four basic steps:
Step 1: Define the problem
Step 2: Estimate the change in final demand (tourism spending).
Step 3: Estimate the regional economic effects of this change
Step 4: Interpret, apply, and communicate the results
Procedures for carrying out steps 2 and 3 are outlined under question 6 (above) and illustrated in more detail in the
companion report. This bulletin provides background on economic impact concepts and methods to help users of
such studies in interpreting and applying the results. We therefore focus on the key elements to consider in
defining problems for an economic impact analysis.
The most important part of any study is the first step -- clarifying the nature of the problem being
addressed and intended uses of the results. Before launching an economic impact study, be sure this is the kind of
study that is needed rather than one or more of the other kinds of economic analyses summarized in question 1.
Stynes and Propst (1996) identify seven factors that should be specified as part of defining a problem for an
economic impact assessment:
1. Define the action to be evaluated. Begin by clarifying the action or actions involved in the problem.
Actions may include construction, government investment, changes in marketing, management, or
policies, or changes in the quality or quantity of tourist facilities. If evaluating impacts of existing
tourism activity, be sure to define what is to be included as “tourism”.
2. Identify the change in the amount and kinds of recreation/tourism activity resulting from the
action. The action must be defined precisely enough in step one to be able to estimate the changes in
the number and types of visitors to the area and/or their spending patterns. As a general rule, the
analysis should be with vs. without the action rather than simply before vs. after. Thus, if tourism
has been growing by 5% per year and a new promotional program increases this to 10% this year,
only half of the 10% growth can likely be attributed to the promotional program. Identifying the net
changes in activity that are attributable to an action can be a complex and difficult task. Assessments
of economic impact, however, rest firmly on such estimates, so attention to these details is very
important. In situations of some uncertainty, we recommend evaluating impacts using a range of
estimates in order to establish rough confidence intervals around your estimates. Evaluating a range
of alternatives also helps to evaluate the sensitivity of the results to your initial estimates of changes
in activity levels.
3. Identify the kinds of spending to be included. Tourism may impact the local economy through
visitor trip spending, durable goods purchases, government spending, or investment and
construction. Which to include in a given analysis depends on how the problem is defined, and
again, on attributing given spending changes to the proposed action.
4. Identify the study region. Perhaps the most important, yet often neglected part of a recreation and
tourism impact assessment is the definition of a study region. The region defines the area for which
impacts are desired, as well as the portions of visitor spending that are relevant. An impact
assessment evaluates the impacts on households, businesses, and organizations within the given
region. Spending that visitors make outside of a study region either at home or enroute are not
included in assessing impacts of spending on the designated region. For an economic impact
analysis, the study region should be large enough to constitute a viable economic region. Since little
economic data exists below the county level, the county is generally the smallest region one should
consider for a tourism impact assessment.Economic impacts of Tourism Page # 13
5. Identify key economic sectors and desired sectoral detail. The proposed action and anticipated
uses/users of the results should suggest the key sectors that will be impacted. Recreation and tourism
activity typically impact the lodging, restaurant, amusements, retail, transportation and government
sectors most directly. In the problem definition stage consideration of impacted sectors helps to
identify relevant categories of spending. The desired sectoral detail plays an important role in
structuring the presentation of results. In some cases only an aggregate measure of impacts may be
desired. In other cases, clients may be interested in which particular sectors are most heavily affected
and will want estimates of sales and jobs broken down by sector. If formal input-output models are
used, impacts may be estimated in considerable sectoral detail. This is not possible if an aggregate
spending estimate or multiplier is used.
6. Identify the most important measures of economic activity. Tourism impacts may be reported in
terms of visitor spending, business receipts/sales/production, wage and salary income, proprietors
income and profits, value added, and employment. The direct effects are the most important and are
captured well by estimates of visitor spending. Simple ratios can be used to convert direct spending
or sales to the associated income and jobs. Input-output models and multipliers are needed only if
one is interested in secondary effects.
7. Identify the tolerable levels of error in the results. Although confidence intervals and estimates of
error are rare in economic impact studies, this doesn't mean they are not important. You should have
at least a ballpark idea of how much error you can tolerate in the analysis, as this will dictate how
much effort and expense you must put into it. The more accuracy you demand, the greater the
requirements to gather up-to-date local data on visitation, spending and economic activity. These
data allow you to fine tune the spending estimates and input-output models or multipliers. Such fine
tuning will require time, knowledge, and money that must be weighed against the benefits of the
improved estimates. Estimates of impacts are based on three components: visits, spending, and
multipliers. You should try to balance the errors across these components.
9. What are some questions to ask when evaluating or interpreting a tourism economic impact study?
Evaluating, interpreting and applying an economic impact study requires a clear understanding of the
findings and at least some knowledge of the underlying concepts and methods. Judging the accuracy or quality
of a study can be based on the reputation of the author or the quality of presentation, although a careful
evaluation of the methods that were used is the best approach. Here’s some questions to ask when reading or
evaluating a tourism economic impact study.
· Impact of what? The report should identify the action being evaluated. An economic impact assessment is
most useful when evaluating the effects of a particular action or policy. If so, the action and assumptions about
alternatives should be spelled out in presenting a with vs. without scenario. If the study reports impacts of
existing tourism activity, identify how tourism is defined (if at all). What kinds of tourism activity and
spending are included? Which trip expenses are included? Does the study include all visitor spending or only
spending of tourists who live outside the local region? Does the study address impacts of visitor trip spending,
durable goods purchases, operational expenses of a program, or construction and investment?
· On what region? The study region should be defined (preferably with a map). It should be viable both
economically and as a distinct tourism destination area. Spending that is included should be restricted to
spending in this region and multipliers should represent the given region of interest. A short profile of tourism
& economic activity in the region provides useful background for an economic impact study.
· Sources and quality of the data. The report should identify the sources of the data for estimating visits,
spending, and regional economic multipliers/models. The methods that were used to estimate impacts should
be clear. Judgements of the quality of the estimates must be based largely on an understanding of the data andEconomic impacts of Tourism Page # 14
methods that were used. A more disaggregate analysis reporting spending within at least six categories,
visitors for two or more distinct segments, and multipliers and results broken down by sector will generally be
more accurate and meaningful than a study that only uses aggregate data. Disaggregation is particularly
helpful when adjusting secondary data taken from government reports or other studies to a new situation. The
fundamental question is whether the visit estimates, spending profiles and multipliers adequately represent the
intended population and study area.
· Quality of methods. There are a number of issues to watch for in evaluating methods.
ß Visits. Has the study clearly defined which visits/visitors will be affected by the proposed action,
separated local visitors from tourists, and identified which visitors would be lost or gained due to the
action (with vs. without the action)? Are secondary sources of visitation reliable? If models are used,
how good are they and do the assumptions hold for the intended application? Has the study handled
potential double counting problems in estimating visits?
ß Spending. How accurate are the spending estimates? Do the spending averages or totals seem
reasonable? If spending averages are taken from a secondary source, evaluate the source, as well as
how well these averages may apply to the intended application. What year does the spending
represent? Has the data been price adjusted to the current (or model) year? If spending data come
from a visitor survey, evaluate the survey methods – how was spending measured, what was the
sample size, the response rate, soundness of the analysis? Are variances and confidence intervals
reported for the spending estimates? Are visitors divided into distinct segments to reduce variances?
Also make sure the units for which spending is reported match the units for visits, i.e., the study
doesn’t multiply a per party spending average times the number of person visits. If adjustments are
made in units of analysis, evaluate the assumed or estimated average length of stay or party size
assumptions.
ß Multipliers. If “off-the-shelf” or borrowed multipliers are used, investigate the source. Does the study
clearly define what type of multiplier is being used (Type I, Type III, income, sales or employment,
ratio or Keynesian) and use the multiplier appropriately? In particular, watch for studies that multiply
tourism spending by a multiplier taken from an input-output model. They should adjust for the
capture rate either by reducing spending, only using retail margins on goods purchased by tourists, or
using a “tourist spending” multiplier that takes the capture rate into account. If an input-output model
is used, the report should summarize where it came from, what year it represents, the levels of
sectoral aggregation, and the basic assumptions of the model.
· Communication and reporting of results. The study should communicate the study results in terms that are
understandable to the intended audience. For most audiences, a summary and glossary of economic terms is
helpful. Most readers will not fully understand terms like indirect and induced effects, Type I and Type III
multipliers, and input-output models. Formal definitions of the measures of sales, income, and jobs that are
reported are also needed to clarify what each of these terms include and the measurement units. For example,
is income only wage and salary income or does it also include proprietors income, rents and profits? Study
limitations and errors should be indicated.Economic impacts of Tourism Page # 15
10. What does an economic impact study cost?
The costs of a tourism economic impact study can range from $500 to $50,000 and more. Costs will
depend largely on the size and scope of tourism activity to be covered, the size and complexity of the study region,
how much primary data are to be gathered and the level of accuracy and detail desired. The greatest and perhaps
most significant cost will be the technical expertise of the analysts involved. Tourism economic impact studies
require considerable technical judgement of specialists and a mix of corresponding skills:
· Knowledge of tourism
· Expertise in conducting tourism surveys, particularly spending studies
· Regional economic modeling skills, including knowledge and access to economic data bases, multipliers
and input-output modeling systems
· Communication skills
The cost of conducting economic impact studies has dropped substantially in the past ten years due to
improvements in microcomputer programs for estimating spending and regional economic models. The three
principal components of an economic impact estimate (visits, spending, and multipliers) each involve different
costs and somewhat different skills. The costs and needed skills will vary considerably depending on whether
primary or existing data are to be used.
If levels and types of tourism activity are known and spending averages and multipliers may be taken from
secondary sources, a complete economic impact assessment can be conducted in less than a month and in many
cases for under $5,000. You are paying primarily for the time, judgement and skills of the analyst. A small visitor
spending survey may add another $5,000. For a more complete analysis of secondary effects using a formal inputoutput model, figure another $2,000- $5,000. Increase the cost estimate if several distinct alternatives are to be
evaluated or multiple regions are involved. There will generally be scale economies in these situations with
additional impact analyses costing less than half of the initial one. Costs will increase significantly if the number
and types of visitors must be estimated using a general visitor survey or a demand model. Large scale spending
surveys and custom input-output models based on primary data will also increase costs considerably.
In many cases, the tourism activity and visitor spending data needed for an economic impact analysis can
be gathered in a general visitor survey or market study. Spending averages for particular tourist segments can be
estimated by having a portion of the general survey respondents complete an extra page of spending questions.
Armed with good estimates of the number and types of visitors and their spending patterns, one can complete an
economic impact study at little additional cost.
Summary and Conclusion
The principal motivation for a business or region to serve tourists are generally economic. An individual
business is interested primarily in its own revenues and costs, while a community or region is concerned with
tourism’s overall contribution to the economy, as well as its social, fiscal and environmental impacts. A good
understanding of tourism’s economic impacts is therefore important for the tourism industry, government officials,
and the community as a whole.
Tourism economics is unfortunately a technical area, involving concepts, methods, and models that are
unfamiliar to most non-economists. In this bulletin I’ve attempted to define the key concepts and explain the basic
methods for estimating the economic impacts of tourism, hopefully in as “non-technical” a way as the subject
allows. Understanding the concepts and methods is critical to interpreting, evaluating, and applying economic
impact results. This bulletin should be read along with one or more economic impact reports that can be used as
examples and opportunities to test your grasp of the issues. For those who do not have a particular tourismEconomic impacts of Tourism Page # 16
economic impact report in mind, I’ve assembled three illustrative examples (those summarized in question 7) in a
companion bulletin.
At the risk of oversimplifying a complex topic, let me conclude with the five pieces of advice I most
frequently give to people who ask about tourism economic impacts. First, I tell them that the most important
information for estimating tourism impacts is a good estimate of the number of tourists. This requires clearly
defining what one wishes to include as “tourism” and the region of interest. Secondly, I recommend that tourists be
divided into distinct subgroups (segments) with distinct spending patterns and likely reacting differently to various
policy and marketing actions. In particular, local customers should be distinguished from visitors from outside the
region and day users from overnight visitors. Thirdly, focus most of your effort on estimating the direct effects of
tourism, usually as tourist spending in the area. Multiplier effects are not nearly as important in most cases, as
their use in tourism would suggest and multipliers tend to introduce complexities that most users of the results do
not fully understand. Even if multiplier effects are important to the study purpose, remember that any errors in
estimates of the direct effects will also be multiplied by any multiplier. Fourth, if you must use multipliers be sure
you understand them. For local impacts, I usually recommend tourism spending multipliers between 1.0 and 1.5. If
one has no idea of the size of the multiplier, I recommend using 1.0. This is easy to multiply by and refocuses us on
the direct effects. Tourism sales multipliers are often close to one because the secondary effects of tourist spending
(mostly induced) are generally just large enough to offset the spending that is not captured by the local economy. If
you must include multiplier effects, be sure to report the direct effects separately, so readers can decide whether
and when to include the secondary effects. Finally, I recommend income or value added as the best measures of
economic impacts to report. Sales and job impacts can be quite misleading, as sales may go largely to buy parts
from outside the region and job estimates are distorted by part time and seasonal positions, not to mention quite
different wage rates across industries. Income or value added are the best measures of the economic gain to the
region from tourism. It follows that income multipliers (of the Keynesian type) should be used instead of sales
multipliers.
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Archer, B. H. 1984. "Economic impact: Misleading multiplier." Annals of Tourism Research 11(3): 517- 518.
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Bull, Adrian. 1995. The economics of travel and tourism. 2nd edition. Melbourne, Australia: Longman.
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Crandall, Louise. 1994. The social impact of tourism on developing regions and its measurement. In. Travel,
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Leistritz, F.L. and Murdock, S.H. 1981. The socioeconomic impact of resource development: Methods for
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WTTC.Economic impacts of Tourism Page # 18
Glossary of Economic Impact Terms
Terms are presented in groups within a logical rather than alphabetical order
Region – defines the geographic area for which impacts are estimated. The region is generally an aggregation of
one or more counties.
Sector is a grouping of industries that produce similar products or services. Most economic reporting and models
in the U.S. are based on the Standard Industrial Classification system (SIC code ). Tourism is more an activity
or type of customer than an industrial sector. While hotels (SIC 70) are a relatively pure tourism sector,
restaurants, retail establishments and amusements sell to both tourists and local customers. There is therefore
no simple way to identify tourism sales in the existing economic reporting systems, which is why visitor
surveys are required to estimate tourist spending.
Impact analysis estimates the impact of dollars from outside the region (“new dollars”) on the region’s economy.
Significance analysis estimates the importance or significance of an industry or activity to a region usually
including spending by both local residents and visitors from outside the region.
Input-output model. An input-output model is a representation of the flows of economic activity between sectors
within a region. The model captures what each business or sector must purchase from every other sector in
order to produce a dollar’s worth of goods or services. Using such a model, flows of economic activity
associated with any change in spending may be traced either forwards (spending generating income which
induces further spending) or backwards (visitor purchases of meals leads restaurants to purchase additional
inputs -- groceries, utilities, etc.). Multipliers may be derived from an input-output models.
IMPLAN is a micro-computer-based input output modeling system. With IMPLAN, one can estimate 528 sector
I-O models for any region consisting of one or more counties. IMPLAN includes procedures for generating
multipliers and estimating impacts by applying final demand changes to the model.
Final Demand is the term for sales to final consumers (households or government). Sales between industries are
termed intermediate sales. Economic impact analysis generally estimates the regional economic impacts of
final demand changes. Tourist spending is one type of final demand.
Direct effects are the changes in economic activity during the first round of spending. For tourism this involves the
impacts on the tourism industries (businesses selling directly to tourists) themselves.
Secondary effects are the changes in economic activity from subsequent rounds of re-spending of tourism dollars.
There are two types of secondary effects:
Indirect effects are the changes in sales, income or employment within the region in backward-linked
industries supplying goods and services to tourism businesses. The increased sales in linen supply firms
resulting from more motel sales is an indirect effect of visitor spending. \
Induced effects are the increased sales within the region from household spending of the income earned in
tourism and supporting industries. Employees in tourism and supporting industries spend the income they earn
from tourism on housing, utilities, groceries, and other consumer goods and services. This generates sales,
income and employment throughout the region’s economy.
Total effects are the sum of direct, indirect and induced effects.Economic impacts of Tourism Page # 19
Multipliers capture the size of the secondary effects in a given region, generally as a ratio of the total change in
economic activity in the region relative to the direct change. Multipliers may be expressed as ratios of sales,
income or employment, or as ratios of total income or employment changes relative to direct sales. Multipliers
express the degree of interdependency between sectors in a region’s economy and therefore vary considerably
across regions and sectors.
Type I multipliers do not include induced effects while Type II or Type III multipliers do.
A sector-specific multiplier gives total changes throughout the economy associated with a unit change in
sales in a given sector.
Aggregate multipliers are based on some assumed initial changes in final demand. An aggregate tourism
spending multiplier is based on an assumed distribution of tourist spending across economic sectors.
Capture rate is the percentage of spending that accrues to the region’s economy as direct sales or final demand.
All tourist spending on services within the region is captured, however, tourist purchases of goods is generally
not all treated as final demand to the region.
Purchaser prices are the prices paid by the final consumer of a good or service. Producer prices are the prices of
goods at the factory or production point. For manufactured goods the purchaser price = producer price + retail
margin + wholesale margin + transportation margin. For services, the producer and purchaser prices are
equivalent. The retail, wholesale and transportation margins are the portions of the purchaser price
accruing to the retailer, wholesaler, and shipper, respectively. Only the retail margins of many goods
purchased by tourists accrue to the local region, as the wholesaler, shipper, and manufacturer often lie outside
the local area.
Measures of economic activity:
Sales or output is the dollar volume of a good or service produced or sold
Final Demand = sales to final consumers
Intermediate sales = sales to other industrial sectors
Income is the money earned within the region from production and sales. Total income includes
Wage and salary income, and
Proprietor’s income, rents and profits
Jobs or employment is a measure of the number of jobs required to produce a given volume of
sales/production. Jobs are usually not expressed as full time equivalents, but include part time and
seasonal positions.
Value Added is the sum of total income and indirect business taxes. Value added is the most commonly
used measure of the contribution of a region to the national economy, as it avoids double counting of
intermediate sales and captures only the “value added” by the region to final products.
-74-
VI. TOURISM AND THE MILLENNIUM DEVELOPMENT GOALS
The Millennium Development Goals (MDGs) represent a global partnership
aimed at responding to the world's main development challenges, including poverty
reduction, opportunities for education, better maternal health, gender equality, and
reducing child mortality, AIDS and other diseases. The MDGs are an agreed set of
goals to be achieved by 2015 based on all actors working together at global, regional
and national levels. Strategies based on working with a wide range of partners can
help create coalitions for change that support the MDGs at all levels; benchmark
progress; and help countries build the institutional capacity, policies and programmes
needed to achieve the MDGs.
62
It is generally assumed that international tourism can
generate benefits for poor people and poor communities in the context of sustainable
tourism development, usually without specifically targeting the poor.
However, greater attention has been given to the argument that tourism could
be more effectively harnessed to address poverty reduction in ways that are more
direct. For example, according to UNWTO, tourism can contribute to development
and poverty reduction in a number of ways. Although the focus is usually on
economic benefits, there can also be social, environmental and cultural benefits.
Poverty can be reduced when tourism provides employment and diversified livelihood
opportunities, which provides additional income. This can contribute to reducing the
vulnerability by increasing the range of economic opportunities available to
individuals and households living in conditions of poverty. Tourism can also
contribute through direct taxation and by generating taxable economic growth since
taxes can then be used to alleviate poverty through education, health and
62
UNDP, Millennium Development Goals. www.undp.org/mdg/ -75-
infrastructure development.
63
These points refer to the general contribution of tourism
at the macro level. When considering targeted interventions aimed at achieving
specific MDGs, then actions to make tourism contribute to poverty alleviation at local
and community levels needs to be considered. At the same time, however, it is equally
important to consider how such targeted interventions can be replicated in other
communities or scaled up to have a wider impact.
Targeted interventions to address the issues raised in the Millennium
Development Goals require that the linkages between tourism and poverty be
identified. Figure 3 illustrates many of these linkages.
63
WTO, Tourism and Poverty Alleviation, (Madrid: WTO, 2002), p. 31 -76-
Table 14 develops the figure further and lists the potential contributions that
appropriate interventions in the tourism sector can make to the achievement of each of the
MDGs. As discussed in chapters II and III, the creation of income and employment in the
tourism industry and the tourism economy would contribute to reducing the proportion of
people living on less than a dollar a day (target for Goal 1).
Similarly, the provision of infrastructure facilities and services for tourists (roads,
communications, health and sanitation services) can be designed to benefit local communities
at the same time. Such facilities can contribute to the achievement of Goals 4, 5, 6 and 7. In
the area of gender equality and the empowerment of women (Goal 3), tourism is recognized
Figure 3. Linkages between tourism and poverty reduction -77-
as a sector that employs a high proportion of women. However, careful attention needs to be
given to gender patterns in tourism careers and employment should be carefully studied and
analyzed with particular attention to gender segregation by job category or wage gaps
according to gender.
Table 14. Contribution of tourism to achieving the Millennium Development Goals
Goal Contribution of tourism
1. Eradicate extreme
poverty and hunger
(a) Tourism stimulates economic growth both at the
national and local levels and promotes the growth of the
agricultural, industrial and service sectors;
(b) Tourism provides a wide range of employment
opportunities easily accessible by the poor. Tourism
businesses and tourists purchase goods and services
directly from the poor or enterprises employing the
poor. This creates opportunities for micro, small and
medium-sized enterprises in which the poor can
participate;
(c) International and domestic tourism spreads
development to poor regions and remote rural areas of a
country that may not have benefited from other types of
economic development;
(d) The development of tourism infrastructure can benefit
the livelihood of the poor through improvement in
tourism-linked service sectors, including transport and
communications, water supply, energy and health
services.
2. Achieve universal
primary
education
(a) The construction of roads and tracks to remote areas for
tourists also improves access for school-age children
and for teachers;
(b) Tourism can help local resource mobilization, part of
which can be spent on improvement of education
facilities.
3. Promote gender equality
and empower women
(a) The tourism industry employs a high proportion of
women and creates microenterprise opportunities for
them. It promotes women’s mobility and provides
opportunities for social networking.
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS,
malaria and other
diseases
(a) The construction of roads and tracks to remote areas for
tourists also improves access to health services;
(b) Revenues accruing to national and local governments
through taxes on the tourism industry can be used to
improve health services and nutrition for young
children and their mothers; -78-
Goal Contribution of tourism
(c) Tourism raises awareness about HIV/AIDS issues and
supports HIV/AIDS-prevention campaigns;
(d) Tourism aggravates the spread of HIV/AIDS (negative
effect).
7. Ensure environmental
sustainability
(a) Tourism can generate financial resources for
conservation of the natural environment;
(b) Tourism raises awareness about environmental
conservation and promotes waste management,
recycling and biodiversity conservation;
(c) Uncontrolled tourism may generate negative
externalities as a result of pollution, congestion and
depletion of natural resources (negative effect).
8. Develop a global
partnership for
development
(a) Tourism contributes to the socio-economic
development of least developed countries, landlocked
countries and island developing countries through
foreign exchange earnings and the creation of job
opportunities;
(b) Tourism stimulates the development of the transport
infrastructure, which facilitates access to and from the
least developed countries, landlocked countries and
island developing countries;
(c) Tourism stimulates internal and external trade and
strengthens supply chains;
(d) Tourism promotes the integration of isolated
economies with regional and global flows of trade and
investment;
(e) Tourism reduces the burden on government budgets
through implementation of public-private initiatives;
(f) Tourism creates decent and productive work for youth;
(g) Tourism provides opportunities for bilateral,
multilateral and subregional cooperation among
countries;
(h) Information technologies play an important role in
integrating tourism enterprises into global tourism
markets.
Source: United Nations ESCAP, Transport and Tourism Division, Transport Policy
and Tourism Section. -79-
The MDG agenda and the role of tourism in poverty alleviation converges
with recent efforts based on the concept of pro-poor tourism. Pro-poor tourism is an
approach to tourism development and management that results in increased net
benefits for poor people by enhancing linkages between tourism businesses and poor
people. Its strategies focus on the local or community level and aim at increasing
tourism's contribution to poverty reduction and enabling poor people to participate
more effectively in tourism development. Among the many different types of poor
people to be considered are: staff, neighbouring communities, land-holders, producers
of food, fuel and other suppliers, operators of micro-enterprises, informal businesses,
craft-makers, other users of tourism infrastructure and resources, and so forth. Types
of pro-poor tourism strategies include economic benefits, livelihood benefits and
increasing local participation by building mechanisms for consultation. Such
strategies often begin by policies, processes and actions designed to reduce negative
impacts on poor people.
64
An instructive example of taking action based on the MDGs and the Tenth
Plan of the Government of India is a four-year project (2004-2008) entitled
“Endogenous Tourism for Rural Livelihoods” being funded by UNDP. The project
incorporates strategies designed to work with a wide range of partners to create
coalitions for change in support of achieving the MDGs at the local level and build
institutional capacity based on a new model known as endogenous tourism, which is
linked to the concept of rural tourism. In India, 74 per cent of the population resides in
7 million villages, which makes the concept of rural tourism appropriate.
64
Pro-poor Tourism www.propoortourism.org.uk/strategies.html -80-
Urban-centric industrialization along with the stress of urban lifestyles has led
to "counter-urbanization" thinking.
65
That is, theories of demographic transition due
to migration based on past patterns presumed a series of three major population
movements (rural to rural, rural to urban and urban to urban) as determined by
industrialization, economic development and urbanization. Demographers have
recently recognized a fourth movement, especially in developed countries: urban to
rural, or counter-urbanization. It is generally presumed that developing countries such
as India are going through a delayed transition in migration patterns, where
urbanization has contributed to falling income levels and fewer job opportunities in
rural areas, thus contributing to ongoing rural to urban migration. The Indian
government aims to identify and strengthen local resources (cultural heritage, local
traditions, art and crafts) and empower communities in rural areas through
management of endogenous tourism with a view to influencing the patterns of
migration.
In 2004, UNDP began concrete planning on an Endogenous Tourism Project
for Rural Livelihoods in India, involving communities throughout the country. The
project is structured in terms of India’s cultural heritage and indigenous traditions,
with common facility centres set up for craftspeople with local showcases for art and
craft wares, along with the history and traditions of each area. Communities manage
the project activities with partial financing from an incentive fund to encourage a
variety of rural tourism initiatives and the marketing of local craft products, as well as
dissemination of experiences and practices. Rural tourism in India is in line with
65
Thomas Kontuly, “International Comparisons of Counter-Urbanization”, Geographical
Perspectives, vol. 61 (Spring 1988), pp. 1-5. David Plane, Christopher Henrie, and Marc
Perry, “Migration across the Micropolitan /Metropolitan Spectrum”, paper presented at the
41st Annual Meeting of the Western Regional Science Association, Monterey, California, 17-
20 February 2002. -81-
increased levels of awareness, growing interest in heritage and culture, improved
accessibility and environmental consciousness. This new style of tourism in village
settings would allow international and domestic tourists visitors to experience a
unique lifestyle as well as sustain livelihoods in villages.
66
The main features of the project are presented in box 8.
66
UNDP, “Endogenous Tourism for Rural Livelihoods”, Fact Sheet, May 2007.
http://data.undp.org.in/factsheets/hd-rl/may07/ETP.pdf
Box 8. India: Endogenous Tourism for Rural Livelihoods
From 2003 to 2007, the Ministry of Tourism and Culture, Government of India, has been
working with 34 implementing agencies, 30 NGOs and 4 panchayats at 36 sites across 20 states
throughout the country. Alternative models of rural tourism are being developed across India,
since the government has identified tourism as a vehicle for generating employment and
promoting sustainable livelihoods. Micro-financing is included as part of the project.
Cultural heritage and indigenous tradition are the foundations of the project’s model of rural
tourism. Common facility centres for village craft persons and village art centres are set up at
the 36 project sites to showcase the culture and living heritage characteristic of each site.
Where appropriate, rest houses are built based on local skills and construction materials.
People in the communities are trained in different aspects of hospitality to provide services of
international standard.
Community ownership and management is central to the project’s strategy. At every stage in
the implementation, care is taken to ensure the participation of women, youth and other
disadvantaged groups.
In order to mainstream gender and HIV/AIDS concerns into the project, one of the partner
agencies is the Health Institute for Mother and Child.
By October 2006, most sites were ready to receive tourists and all implementing partners had
become sensitized to gender and HIV/AIDS concerns.
The project won a World Travel Award in the category of “World’s Leading Responsible
Tourism Project” in 2006.
Source: www.exploreruralindia.org-82-
It has been noted that results from such strategies could mean that low
numbers of people are employed and they might be concentrated in certain types of
jobs. However, the spread of earnings, collective income and other livelihood benefits
throughout a community can make pro-poor tourism significant to local poverty
reduction. It is not always possible to say what contribution this makes to national
poverty reduction efforts, since that depends on the scale of tourism within the
economy and the degree of pro-poor change within the sector. However, such tourism
can be very significant to a district or provincial economy, even if it might not be
large enough to affect national aggregates.
67
There are limits to using case studies for assessing the effectiveness of tourism
in alleviating poverty. However, final evaluation of multi-site projects such as India’s
“Endogenous Tourism for Rural Livelihoods” suggests the possibility of learning and
then scaling up such a project for wider coverage. Consideration of the linkages
between tourism and the MDGs clearly illustrates the potential of tourism to have a
greater socio-economic impact. Governments and other stakeholders face the
challenge of translating the potential into actual achievements.
One effort to assess the effectiveness of tourism projects was a World Bank
study that examinined the role of tourism in the World Bank's development strategy
and its lending activities in order to estimate the impacts on the sustainable
development of Bank actions. While tourism has not played an important role in the
Bank's development strategy in the recent past, there are some signs that it is being
seen as more important. Of the 1,500 or so new projects in the Bank from 1998 to
2003, about 6 per cent in terms of number and 3 per cent in terms of value had some
67
Caroline Ashley et al., Pro-Poor Tourism Strategies: Making Tourism Work for the Poor,
Pro-Poor Tourism Report Number1 (Nottingham, United Kingdom: Overseas Development
Institute, 2001), p. 41. -83-
tourism dimension. In terms of lending, direct Bank operations have invested in
infrastructure, which facilitates tourism development. Others that have tried to
mitigate the negative impacts of tourism, such as the spread of diseases such as
HIV/AIDS. In terms of strategic and policy advice, the Bank has supported projects
that were environmentally and socially sustainable and that helped reduce poverty.
The assessment looked at projects that focus on economic development through
infrastructure provision. Among the 1,500 or so projects that were appraised, 32 had
tourism as a central or significant feature. Only eight of the 32 provided any real
quantification of the benefits of tourism. A careful look at these eight revealed that
larger infrastructure investment projects were effective in providing benefits from
tourism. Smaller projects with investment in improving facilities and providing
technical assistance were more effective and yielded higher returns. Projects involving
cultural site development and promotion were also effective in yielding large benefits.
In terms of environmental impacts, the projects generally followed good practice and
ensured that negative environmental impacts were avoided or mitigated. Social
impacts were studied in less detail, according to the study.
68
VII. THE ROLE OF GOVERNMENT
Government intervention may be necessary to enhance the contribution of
tourism to socio-economic development and poverty reduction. One of the principal
roles of Governments is to set policy and legislative frameworks for tourism. Two
main reasons why governments should formulate tourism development strategy are:
68
Anil Markandya, Tim Taylor and Suzette Pedroso, “Tourism and Sustainable Development:
Lessons from Recent World Bank Experience”, (Washington, D.C.: IBRD, 2003), pp. 20-21.
http://info.worldbank.org/etools/docs/library/107771/SD_Communication/epublish/zip_files/b
iodiversity_russia2003/pdf/TourismSDMarkandya-Taylor.pdf
Department of Economic and Social Affairs
Commission on Sustainable Development
Seventh Session
19-30 April 1999, New York
TOURISM AND SUSTAINABLE DEVELOPMENT
SUSTAINABLE TOURISM: A NON-GOVERNMENTAL
ORGANIZATION PERSPECTIVE
Background Paper # 4
Prepared by the UNCSD NGO Steering Committee1
Sustainable Tourism: A Non-Governmental Organization Perspective
prepared by the UNCSD NGO Steering Committee
A. Introduction
1. Tourism is a rapidly growing phenomenon and has become one of the largest industries in the
world. The impact of tourism is extremely varied. On one hand, it plays an important and certainly
positive role in the socio-economic and political development in destination countries by, for instance,
offering new employment opportunities. Also, in certain instances, it may contribute to a broader
cultural understanding by creating awareness, respecting the diversity of cultures and ways of life. On
the other hand, as a tool to create jobs, it has not fulfilled its expectations. At the same time, complaints
from tourist destinations concerning massive negative impacts upon environment, culture and residents’
ways of life have given rise to a demand for a more sustainable development in tourism. Different
parties will have to be involved in the process of developing sustainable tourism. This section focuses
on what the tourism industry itself can do in order to increase its sustainability, defines three major
problems, and suggests possible tourism initiatives to help solve these problems. Other problems
should also be included in the discussion for it to become exhaustive.
B. Industry Initiatives for Sustainable Tourism
Problems
Decreased access to natural resources for the local communities and environmental degradation
4. Tourism is not, as many people assert, a clean and non-polluting industry. A major problem is the
lack of a common understanding of what sustainable tourism or “ecotourism” means. This ambiguity
leads to violations of environmental regulations and standards. Hence, the environmental problems
evolving from tourism are manifold. First of all, the tourism industry is very resource and land
intensive. Consequently, the interest of the tourism sector will often be in conflict with local resource
and land use practices. The introduction of tourism will imply an increased stress on resources
available. An influx of tourists into the area will lead to a competition for resources. Employees
working at the tourist sites compound this competition. Almost as a rule, tourists are supplied at the
expense of the local population.
5. Tourist activities imply an intensified utilisation of vulnerable habitats. Investors and tourists do not
necessarily possess awareness on how to use natural resources sustainably, and subsequently this
utilisation often leads to a degradation of resources. Tourism is also a major generator of wastes. In
most tourist regions of developing countries, sewage, wastewater and solid waste disposal are not
properly managed or planned. Lastly, tourism is also responsible for a considerable proportion of
increased volumes and mileage in global transport and hence the associated environmentally damaging
pollutant emissions. The tourism industry has not shown sufficient willingness to (internalise or)
compensate the cost of conservation of bio-diversity in, for instance, protected areas, even though they
can profit from it.
Increasing cultural erosion and disrespect for human rights
6. Tourism is a powerful agent of change. International tourism acts as a catalyst for the transition
from traditional ways of life to so-called modern, Western forms of society. Accordingly, tourism often
brings with it the introduction of new behaviour trends and norms. Very often, these are contrary to
traditional norms existing in the host community, and can come into conflict with its cultural identity
and threaten the traditional value systems there. The problem is that the investors seem to have a lack
of cultural understanding of the invested society. There is a need for an increased awareness that
establishment of new hotels etc. will have its consequences on the society and the people who live in
it.2
7. Tourism has become associated with violation of human rights. Many destination countries have
experienced an increase in criminality, prostitution, alcohol and drug abuse as a consequence of
tourism. Furthermore, child labour is commonplace in the tourism industry (particularly in the informal
sector). According to estimates made by ILO (International Labour Organisation), between 3 and 19
million children and teenagers work in the tourism sector. A particularly abominable form of violation
of human rights is child slavery and despicable abuse of children taking place in the booming sex
industry in many countries. In these countries, tourism has led to an incredible increase in prostitution
and also in the exploitation of children. The tourism industry has not yet come up with a general
condemnation of these violations of human rights.
Unqualified jobs and foreign exchange leakage
8. The tourism industry is characterised by a high degree of monopoly, which implies a concentration
of services and profits into very few big transnational corporations. In many countries, tourism facilities
mostly belong to foreigners. Furthermore, in local host communities in many countries a relatively
small number of people are involved in the tourism industry in host communities in many developing
countries. Very often, there is a lack of qualified manpower in the locality. Hence, most employees are
recruited form the big cities, neighbouring countries or even from the country of origin of the investors.
9. Multiplier effects from tourism are less significant than is often assumed. One reason is that tourism
industries purchase most of their inputs (materials, products or services) in their country of origin. As
a result, a considerable amount of foreign exchange revenues leaks from the destination countries. The
more goods, services, physical capital and human capital a country must import for its tourism services,
the higher the leakage. Very often the investors are not approaching the local community to see what
it actually can provide. In addition to this, the General Agreement on Trade in Services (GATS), with
its liberalisation of global trade and services, is increasingly undermining the possibilities of individual
countries and regions to control their tourism industries and the possible economic gains from tourism.
Solutions
Decreased access to natural resources for the local communities and environmental degradation
10. In general, the tourism industry should engage in promoting sustainability as a hallmark for
investors. More specifically, investors in tourism should strive to adopt environmentally sound
technologies or other measures to minimise the consumption of local ground water. In the case of water
utilisation, such measures might be water saving equipment, desalination systems and collecting and
utilising rainwater. Using other types of resources in a sustainable manner is, of course, also crucial.
There is a need to use ecological materials and installation of renewable sources of energy systems
(solar energy) in all new buildings and new construction. Furthermore there should be an acceleration
of installation or solar/wind power in all public work projects of communities where tourism will be
introduced. To prevent or minimise the impact of chemical inputs in soil, water and health, one should
start utilising sound ecological methods, including IPM (Integrated Pest Management). Ecological
methods need to be applied in all areas utilised for tourism, including in the maintenance of golf courts,
gardens and recreational facilities.
11. Pollution of ground and coastal waters must be prevented, and recommendations must be made
(perhaps even legislation) for tourism investors to invest in proper sewage treatment facilities.
Appropriate waste disposal systems and ways to separate garbage into organic and non-organic waste
should be developed. Organic waste can be composted and possibly reused on hotel gardens or even
for local farming. This could be done through collaboration with local residents. Residents could
organise themselves and manage the allocated dumping sites, and hence benefit from the system in
receiving payment from the hotel for services rendered. A system to separate the different materials,
and recycle some should be in place at the landfill site, thus reducing the waste even further.3
12. To avoid degradation of the natural environment, tourism projects can help finance protected areas
and safeguard ecologically sensitive regions against further environmental deterioration. By
empowering local populations and have them participating in the entire process, sustainability will be
ensured as it becomes accepted by and adjusted to the local communities. Also, a protected area might
certainly be a suitable tourist-attraction, where tourists can experience amazing nature and learn about
conservation and traditional uses of natural resources in the area.
13. Investors in tourism should always respect the traditional land tenure system in the area and the
traditional user-right systems of resources. In regard to this, the communication and consultation with
the local communities about resource-use is important. Tourism investors should not exclude local
people from using local resources, and thus take away what they depend on for maintaining their well
being. The tourism industry can and must take initiatives to implement that polluter(s) pay a principle
(or other forms of internalisation of externalities) for pollution related to tourism operations. This may
be organised and carried out through local tax systems or through funds established by the tourism
industry for local community development. However, the paid principle should be applied for minor
pollution only and should not be developed into a possibility for investors to pay a symbolic fine for
imposed irreversible negative impacts on the local environment.
14. Inaccurate and/or mild environmental legislation in destination countries may possibly attract more
foreign investors contributing to fast economic growth and development, but with environmental
damage as a consequence. To avoid the dilemma, destination countries will have to choose between
economic development and environmental protection international. Multinational enterprises must be
committed to follow the environmental standards of their home country should these be stricter than
those at the destinations.
Increasing cultural erosion and disrespect for human rights
15. The tourism industry should promote projects, which are compatible with the cultural identity of
the local population's way of life. Furthermore, the tourism sector should always make sure it acts in
accordance with the cultural heritage, and respect the cultural integrity of tourism destinations. This
might be accomplished by defining codes of conduct for the industry and hence providing investors
with a checklist for sustainable tourism projects.
16. Establishing and developing tourist training programmes could be one way of managing codes of
conducts for the tourists. Here, tourists can be informed and educated about the destination for their
travel both before and after their arrival at the site. At the site, tourist information centres can be
established through funding from the investor. The information given to tourists should include codes
of conduct regarding appropriate behaviour and clothing. It is reasonable to assume that people's
offending behaviour is largely a consequence of ignorance rather than intention. Consequently,
information and facts about the destination, ways of life, history, cultural heritage is crucial to help
tourists get along.
17. It is an absolute must that tourism investors do not engage in or promote child labour and
prostitution. Moreover, it is appropriate that the industry commit themselves to a global campaign
against such and any other violation of human rights. Evaluating the sustainability of the tourism
development, in regards to cultural and human rights aspects, is highly recommended for those
responsible for the tourism projects. As with the case mentioned earlier of preventing environmental
degradation, this must be carried out through communication and consultation with the local
communities.4
Unqualified jobs and foreign exchange leakage
18. By devising local training programmes and establishing educational projects, the tourism industry
can ensure that qualified local people are employed in their projects. One should train the local people
instead of foreigners to become guides due to their knowledge of the area and resources. The investors
should be responsive to the kind of knowledge, abilities and skills found in the local communities. Very
often such knowledge and skills are well fitted to be used in tourist activities be it fishing trips, nature
trails, souvenir sales or dancing courses for tourists etc.
19. To constrain foreign exchange leakage, those responsible for the tourism projects should ensure
that local inputs are purchased for their projects. A proper examination of local resources available will
be beneficial for both the industry and the local residents. Usually, there is considerable local
willingness to start producing new products if a market for these products exists. The tourism sector
should also adopt measures to prevent foreign exchange leakage by a commitment to re-investment of
a fair share of the locally accrued profit. We have already mentioned protected areas, training
programmes on codes of conduct for tourists, or possible training of local employees, as projects in
need of funds. Initiatives towards more local community development projects should also be
appropriate.
20. The tourism industry should promote the establishment of small and medium-sized tourism
enterprises which, compared to large-scale hotels etc., have far more moderate impacts on the
environment. It is the industry's responsibility to act as a model for communities to show that it is
possible to do business whilst protecting natural resources. The industry should also promote and
support local communities to start tourism-related businesses and grant access to low interest loans.
It is the responsibility of the tourism sector to ensure total transparency in all transactions, and to
prevent tourism projects from being used as projects for laundering illicit money, as well as to refuse
using bribes as a means to obfuscate or avoid government rules and regulations. There should be a
global boycott against those investors involved in such or other types of illegal activities.
General recommendations and possible solutions which concern all three problem areas
21. Empowerment of residents at tourist destinations, through local participation, may be facilitated
by providing written and legally binding contracts between local people and tourism investors. The
contracts will help to avoid broken promises, which too many examples and previous experience prove
to be a huge problem. In addition to the mentioned examples (providing proper information for tourists
and establishing training programmes for residents), the tourism industry, through for instance the
WTTC or the WTO with NGOs in the selection panels, could issue awards especially for sustainable
tourism projects as an encouragement for investors.
Agents and Partnerships for change
22. In this section, the focus has been on what the tourism industry itself can do in order to augment
and improve its environmental, cultural, social and economic profile and make sure this is sustainable.
However, the industry's effort cannot be successful without a profound collaboration with all
stakeholders.
23. Within the industry, it is important that both small and large-scale tourism operators are included
in the collaboration and that they participate in solving problems related to tourism development. As
mentioned, a sustainable development of the tourism industry can only be ensured through participation
of all local residents in the destination countries. There is a need for a willingness and ability for the
partners to work with this kind of bottom-up approach. In this context, both environment and social
NGOs have an important role to play, putting pressure on the industry and facilitating contracts and
local participation for community development. Governments in both destination and countries of5
origin of tourists and investors are responsible for providing appropriate legislation for sustainable
tourism development, and to follow up the tourism projects with sufficient monitoring and appropriate
sanctioning. Exchange of successful experiences of sustainable tourism projects is an important factor
in this connection. Lastly, an interdisciplinary approach to the problem is necessary: using local,
regional and/or international consultative forums.
C. Influencing Consumer Behaviour to Promote Sustainable Tourism
Problems
24. International tourism plays an ambivalent role in contributing to cultural exchange and sustainable
development. On the one hand, it involves a highly buffered, short-term consumer experience of other
locales. Tourists can pay and leave, remaining isolated from negative impacts at the local level. On the
other hand, tourism may increase recognition of the importance of respecting cultural diversity and
developing an identity as a world citizen. It offers opportunities to educate consumers regarding
responsible tourism and sustainable development. Consumers can play a major role in the
transformation of societies towards sustainability. While mass tourism in the past was rather
producer-driven, the industry today is becoming increasingly consumer-driven. In highly competitive
tourism markets, well informed, responsible consumers can put increasing pressure on the industry to
behave more responsibly.
25. A number of official proclamations have affirmed every individual's right to rest and leisure
including tourism. However, tourism remains an unobtainable luxury for the majority of the world's
population. Tourists primarily originate from affluent industrialised societies where tourism has become
a mass phenomenon. Tourists’ values, attitudes and behaviour are determined by their social
environment, cultural identity and way of life which may be in conflict with local customs. Tourism is
heterogeneous in nature, made up of many different types of traveller, seeking a wide range of tourism
products. Demand is influenced by irrational factors, e.g. fashion and trends. Demand depends on the
availability of time and money, on images, perceptions and attitudes. Tourists have various needs,
desires and motivations, both of a 'push' and 'pull' nature. While household incomes in major touristsending countries are declining, industry sales projections continue to grow, indicating increasing
competition. The consumer mind is set on discount prices and "buy now/pay later" options. This poses
serious threats, as prices already lag far behind any realistic accounting of tourism costs and impacts.
26. Many of the demand patterns in tourism reflect the unsustainable lifestyles of industrialised
consumer societies. Tourism acts as an agent in exporting these life-styles and consumerist attitudes
to less industrialised societies via demonstration effects and modelling. Tourism increases demand for
imported consumer goods in the destinations, with detrimental effects on the environment, due to the
ecological costs of transport and the high amount of waste generated. Increasing imports also reduce
local/national economic gains, due to foreign exchange leakage.
27. The over-consumption of resources by tourists and tourism infrastructure (e.g. the excessive use
of water, firewood or food) is incompatible with sustainable development. The carrying capacity of
natural environments is often exceeded with the addition of tourism demands. Tourist demand for
resources (land, water, energy, food) may also compete with the needs of local people and may increase
social inequality, gender inequality and injustice. Tourist transport, especially air travel, is highly energy
intensive and causes pollutant emissions. Many tourism activities such as skiing, boating, mountain
hiking, motorised water-sports (e.g. jet skies), and trekking represent stress for fragile ecosystems.
Tourists often lack information and awareness about their impact in a different culture and
environment, about their impacts on socio-economic and socio-cultural development, and about the
environmental costs of tourism. While tourists may be open to learning, they are often unaware of
inappropriate behaviour and have little guidance on how to improve them. Others may refuse to adapt6
to local life-styles (even when informed) insisting on their freedom to behave as they want.
28. While the tourism industry may be willing to improve their products and services, there is a conflict
between the industry's pursuit of economic gains and social and environmental responsibility. The
industry lacks information on the requirements of sustainable tourism and on how to integrate economic
forces with environmental and social requirements. Tourists shopping for escapism generally abide by
one fundamental consumer ethic: receipt upon payment. Consumer advocates may intervene where
inferior customer service is delivered. However, the sustainability of corporate practices is
self-regulated. This conflict of interest within the industry, and consumers' low awareness of tourism
impacts, have led to a widespread abuse of 'green' labeling.
29. The mass media, especially television through films and reports about events, sights, etc. in other
parts of the world, are increasingly influential on travel decisions and consumer behaviour in the
destinations. However, these programmes often serve primarily as advertisements, painting images of
destinations, rather than providing relevant information for potential travellers.
30. There is a lack of reliable and appropriate (e.g. age and gender segregated) research data on the
determinants of tourist demand, motivation and behaviour. Few countries, whether tourist-sending or
tourist-receiving, collect such data that are helpful under sustainable development criteria. Most studies
of tourist behaviour focus on mainstream markets or market segments, rather than assessing or
modelling sustainable alternatives. Governments in many tourist destinations and local communities
have little or no information on what to expect from tourism and the incoming tourists, and how to
influence and control tourism and guide tourist behaviour; They are controlled by international/global
institutions, the industry and the consumers. Governments of the affluent countries are only beginning
to look at the issues of outgoing tourism. They are not yet sufficiently aware of their responsibility and
methods to influence tourist behaviour by political and legal guidelines/criteria and appropriate
planning and policies. Trade unions have fought successfully for shorter working hours and more
vacation. However, they need to take more responsibility for helping to create a leisure industry that
is more sustainable.
Solutions
31. Consumer behaviour can and must be influenced by:
· Fighting unsustainable forms and aspects of tourism, at the various levels, by sanctioning
unacceptable behaviour and discouraging inappropriate consumer behaviour.
· Promoting responsible and sustainable patterns of behaviour, at the various levels, by
promoting best practises and encouraging responsible consumer behaviour. There are
different types of instruments and remedial measures available:
· Legal measures (rules, regulations, sanctions);
· Market based instruments, such as taxes to influence market prices;
· Promotion of and (financial) support for best practice;
· Industry self-monitoring/codes of conduct;
· Information, education and research.
Agents and Partnerships for Changes
Institutional Action & Possible Partnerships
32. Consumer behaviour in tourism is both a product and cause of policies by government and industry.
Therefore, a comprehensive approach is required to solve the problems associated with market-driven
tourism. Tourism should be viewed as a major development issue that all stakeholders need to be
actively engaged with. To develop effective partnerships, the imbalance of power between the different
stakeholders needs to be addressed.7
33. UN Action
· Establish an NGO tourism advisory group for UN to provide technical support, analysis,
and strategic advice;
· Create a 'best practices' information clearing-house, in order to collect consumer
information useful to understanding and positively influencing consumer behaviour and to
make documentation accessible on an equitable basis;
· Initiate a broad information and awareness campaign to highlight damaging forms of
tourism and impacts, providing tools for informed decision-making. Initially, target
participants in the CSD and CBD processes to clarify roles and responsibilities;
· Research and develop effective certification schemes, form a technical group under the
CSD to assess how certification can be improved, e.g. through the review of voluntary
codes set up by CSD1998;
· Designate an 'ombuds' office jointly between the CSD, CBD, and UN-CHR to encourage
diligent self-regulation and compliance with international standards for sustainable tourism;
· Develop guidance on tourism as an issue within Local Agenda 21 processes.
34. Governmental Action
· Introduce and enforce legislation to abolish child prostitution, implement effective control
mechanisms, conclude judicial assistance agreements;
· Regulate tourist access to ecologically fragile or stressed natural areas;
· Tourist-sending countries: develop policies on outgoing tourism from a development
perspective;
· Provide frameworks for ecologically appropriate pricing by strictly applying the polluterpays-principle to internalise external costs. This includes ecological tax reforms including
the taxation of aviation gasoline and oil, removal of subsidies/other economic incentives
with negative environmental impacts.
· Improve conditions for sustainable consumer behaviour by providing/promoting
sustainable tourism facilities;
· Promote environmentally friendly modes of transport and transport concepts, reduce
tourism-related traffic, shift demand to less environmentally damaging modes of transport;
· Promote renewable sources of energy (such as solar power), reduce the use of
non-renewable energy and of limited local resources, through more sustainable
practices/consumption patterns.
· Develop information and education programmes in co-operation with local stakeholders
ensuring all stakeholders' involvement (e.g. women's); provide information to tourists on
appropriate behaviour (sensitivity, respect for/adaptation to local culture), e.g. by
establishing information centres in destinations, or by including briefing material for
package tours;
· Take into account the specific information needs of various market segments, provide
information to the local population on the opportunities and risks from tourism and on how
to influence tourist behaviour;
· Adopt, observe, implement and promote codes of conduct, e.g. the planned WTO-OMT
'Global Code of Ethics for Tourism';
· Integrate sustainable development education including tourism in the curricula of schools
at all levels, universities and training institutions, involving all stakeholder groups, create
and promote open networks for information and research on sustainable tourism,
disseminate and implement results;
35. Tourism Industry Action
· Promote sustainable tourism products, using market related instruments and incentives,8
such as contests, awards, certification, model projects, culturally sensitive quality labels
covering both environmental and social sustainability;
· Reduce inappropriate consumption, use local resources in preference to imports in a
sustainable manner; reduce and recycle waste, ensure safe waste disposal, develop and
implement sustainable transport policies and systems, e.g. efficient public transport,
walking, cycling in destinations;
· Provide tourists with authentic information, enabling them to understand all environmental
and related aspects (e.g. human rights situation) of tourism when selecting any destination
or holiday package; educate visitors in advance of arrival and give guidance on 'dos' and
'don'ts'; make tourists aware of their potential impact on and their responsibilities towards
host societies;
· Provide information on respecting the cultural and natural heritage of destination areas;
employ tour guides who portray societies honestly and dispel stereotypes;
· Ensure that the marketing of 'green' tourism reflects sound environmental policy and
practice; use non-exploitative marketing strategies that respect people, communities and
environments of destinations, dismantle stereotyping, integrate sustainable tourism
principles when creating new marketing strategies;
· Train staff to foster tourist responsibility towards the destinations, encourage multi-cultural
education and exchange;
· Actively discourage exploitative sex tourism, particularly sexual exploitation of children,
and tourism which causes or contributes to social problems;
· Adopt, observe, implement and promote codes of conduct.
36. NGO Action
· Disseminate information to a wide public about the complexity of tourism and about the
objectives and criteria of sustainable tourism;
· Educate tourists to change consumption patterns and promote appropriate, environmentally
and socially acceptable behaviour in the destinations;
· Launch broad awareness campaigns on the worst impacts of tourism, to be funded by
international governmental and non-governmental agencies;
· Promote relevant research on tourism impacts, criteria for sustainable tourism and
possibilities for implementation;
· Monitor tourism development, policy, industry initiatives, and local people's reaction to
tourism development and policy, and implementation of stakeholder action.
D. Promoting Broad-based Sustainable Development through Tourism whilst Safeguarding the
Integrity of Local Cultures and Protecting the Environment - Community Development
Problems
37. Early tourism development has given little consideration to natural resource limitations, impacts
on wildlife and indigenous cultures. The human environment and development has been largely
ignored. Within the process of globalisation local communities' participation and nature conservation
are threatened and often overlooked.
38. If tourism is to be sustainable, it must improve the lives of local people, protect their environment
and health, and offer them a better future. In many instances, tourism can be seen as a vehicle to
empower local communities and protect the environment through the development of new employment
opportunities, the enhancement of local economies, preservation of indigenous knowledge and
practices, public awareness and education. Sustainable tourism can create positive opportunities for
community development in remote areas. The business sector can choose sustainable tourism over
other more polluting ventures. Long and short-term development plans should be developed so that9
tourism and its benefits are spread within the area. To develop tourism in a sustainable manner, it is
necessary to define optimal tourism destinations in local areas and regions, ensuring enjoyment for the
tourist and minimum impact or disruption for the environment and local communities.
39. Complex and broad-based local communities' involvement in tourism development requires
targeted investment strategies implemented by local decision-makers. Those strategies do not exist in
many areas and the development of tourism is not planned. Often, tourism investments are imposed
from the outside, and the potential for sustainable forms of tourism is weakened. Alternatives to mass
tourism (e.g. cultural and “ecotourism”) can be influential in changing the nature of tourism. Tourism
can benefit both tourists and local communities and allow for two-way interaction and education.
Solutions
40. In order for tourism to become a sustainable industry, countries, states, regions, and individuals
must work with new technology, natural resource management and marketing concepts. Ideally,
participatory planning and implementation will be a part of Local Agenda 21 processes. To ensure
community involvement and to safeguard local cultures, sustainable tourism development should
therefore involve all stakeholders in tourism development at all appropriate levels, facilitate the
development of tourism services that are planned, managed and reviewed by the host community in
Local Agenda 21 processes. This will also ensure that tourism revenue stays in the host communities
to enhance livelihoods and generate a profitable source of income, empower and motivate local groups
to direct cross-cultural exchange in the way they wish and adopt practices which conserve, protect and
preserve the environment.
41. Local and regional Tourism Boards should be created, involving all stakeholders. These Boards
should:
· promote sustainable tourism concepts in co-operation with local governments and all
stakeholders, in line with Local Agenda 21 priorities;
· work systematically to attract investment in sustainable tourism;
· help other institutions in developing marketing strategies and training programmes and
developing educational materials;
· work together with different public institutions to involve all stakeholder groups in tourism
activities, and bring greater benefits to the entire community; and
· co-operate with grass-roots organisations to develop employment strategies through
sustainable tourism.
Agents and Partnerships for Change
Institutional Action
42. The UN-CSD should:
· invite countries to integrate tourism into their sustainable development strategies for the
2002 review;
· ask the review progress in local communities involvement in tourism development in their
country profiles to the preparatory meetings for Earth Summit III in 2002 as part of the
review process;
· instruct DESA in co-operation with relevant UN agencies and convention secretariats,
major groups and all stakeholders to develop indicators of sustainable tourism;
· invite convention secretariats and the Committee on the Environment of the WTO-OMC
to report annually to the CSD;
· establish an international “ombuds” office to deal with human rights abuses and
environmental destruction in tourism;.
· ask UNEP, through their Technology Industry and Economics Division, to work with
industry associations at all levels, trade unions, local authorities and NGOs to develop a10
framework for 'good practice' and to develop a database on good practice, criteria,
examples and analysis which should be accessible to governments and stakeholders alike;
· ask UNEP together with UNCHS, the Sustainable Cities Programme and relevant
stakeholders to develop guidance notes on tourism within Local Agenda 21.
· ask the UN Regional Commissions to prepare a report for the preparatory meetings for
Earth Summit III in 2002 on sustainable and community-based tourism activities within
their region and to work with UNEP/WTO to develop regional agreements to address
sustainable tourism.
· invite UNDP to share its work on guidelines for "good practice" and to involve indigenous
peoples and local communities this work;
· ask the UNDP country offices to bring together UN agencies, bilateral donors and other
stakeholders to work together on sustainable tourism, as well as involve the gender
development programme in this process;
· ask UNDP to include sustainable tourism into its poverty alleviation strategies and
programmes.
· ask the United Nations Conference on Trade and Development to integrate tourism into
their development strategies and include a progress review on the role of indigenous and
local communities' involvement in tourism for the Earth Summit III (year 2002) review,
and to support community-owned and controlled initiatives in tourism and bio-diversity
through its BIOTRADE initiative.
· invite environmental conventions and treaties secretariats to include community-based
tourism in their action plans and programmes, and to promote it as an incentive for the
conservation and sustainable use of bio-diversity.
43. Multilateral financing and assistance agencies should:
· provide funds for applied research through pilot projects to determine optimal mechanisms
for tourism development in a range of differing circumstances;
· create small-scale credit lines to assist small enterprises to invest in tourism without
excessive risk on personal property;
· support community controlled tourism initiatives that are directed to poverty alleviation,
bio-diversity conservation and promotion of human rights;
· assess their projects' effectiveness on local, sub-national and national levels involving all
stakeholders, and publish the results by the Earth Summit III in 2002;
· take part in a discussion forum on minimising leakage, with findings to be brought back
to the finance discussion at CSD-8 in 2000. Possible outcomes include the development
of a purchasing/procurement strategy for the tourism industry, local/ national investment
strategies, improved mechanisms for informed choice by consumers, and a linking of aid
with capacity building in tourism-dependent areas.
44. Governments should, at national level
· establish/clarify institutional and departmental responsibility for developing outgoing
tourism and harmonise institutional interventions;
· initiate the use of tourism for local economic development by involving all sectors
alongside the tourist ministry; to build the capacity to work at the destination level,
including product development and effective management of existing destinations;
· facilitate research grants on sustainable tourism, methodologies, impacts and analysis of
good practice; finance pilot schemes to develop 'good practice' and establish systems for
ongoing evaluation and monitoring;
· establish sustainable tourism policies and regulations, ensuring responsibly zoned
development; natural and cultural heritage and resource conservation and protection;11
· review land ownership in potential tourism areas and where possible transfer ownership
to local communities and provide the necessary training for them;
· include the perspective of local and indigenous communities into local and national
sustainable development strategies;
· increase funding for local NGOs to enable them to engage in a dialogue on tourism;
· support public education programmes which encourage responsible consumption, natural
resource use, environmental protection and local culture conservation;
· give priority to the following investment suggestions: create funds to help tour operators
improve their technical capacity for sustainable tourism development; create funds to
develop recreational facilities for the public;
· encourage local banks and other lending institutions to set up regional investment funding
programmes, including micro-credit programmes;
· create Regional Tourism Boards, fully staffed, to help in planning, promoting, regulating,
and expanding sustainable tourism;
· initiate special marketing programmes by local governments and Tourism Boards, in which
local tourism programmes will be advertised in the media;
· initiate programmes to improve the management of eco-tourism in protected areas;
· set up training programmes for guides, tour operators, marketers, etc.
45. Governments should, at local level
· harmonise laws on tourism including regulations, fee standards, licensing, etc. so that they
will be more favourable to sustainable tourism in the region;
· ensure that tourism development is in line with Local Agenda 21 priorities and land-use
plans and that the public can participate in local and regional decision making;
· regulate tourism to ensure that profits benefit local people and conservation efforts;
· Develop and support programmes to revitalise the diverse aspects of local cultures.
46. The tourism industry should
· reduce financial leakage and support local economies by buying food and resources locally,
develop long-term partnerships with local operators, businesses and suppliers;
· train and hire local staff and contract with local businesses, promote management
opportunities for women;
· prefer accommodations owned, built and staffed by local people, promote locally made
handicrafts and traditional products;
· encourage clients to study and understand their destinations, respect local cultures and
co-ordinate visits with local communities, authorities and women's organisations, being
aware of and being sensitive to local customary laws, regulations and traditions, whilst
respecting historical heritage and scientific sites;
· educate staff to avoid negative environmental and cultural impacts and create incentive
schemes to promote sustainable behaviour.
47. NGOs should:
· initiate stakeholder dialogue on community involvement in tourism development,
recognising social and gender divisions in communities;
· promote consultation processes in tourism planning, involving local communities;
· launch educational and awareness programmes on tourism for local communities, support
and promote history research and museums;
· promote the respect for indigenous peoples and local communities' self-determination,
autonomy and social and cultural integrity;
· strengthen their efforts to empower disenfranchised groups (in particular women) to12
become involved in local tourism planning and management;
· develop participatory programmes to support the integrity of local cultures and economies;
· support the sustainable resource use and initiate environmental actions on different levels
to conserve the environment while the tourism is developing;
· analyse the experience with sustainable tourism in different parts of the world, in order to
disseminate methodology/positive examples of community involvement in tourism;
· support the use of traditional knowledge, practices and innovation systems relevant for the
conservation and sustainable use of biological resources and promote actions on different
levels to eradicate poverty, protect human rights and conserve the environment while
working in tourism.
Possible Partnerships
48. There is an urgency to constructively shape tourism in order to support local development and
conservation goals. UN bodies and institutions, governments, industry and civil society should
co-operate to launch a dialogue process on sustainable tourism. This must be planned within the
framework provided by the various UN treaties and declarations. All the stakeholders involved in and
affected by tourism should be involved in the development of action plans for sustainable tourism.
Identifying mechanisms to achieve sustainable development goals in tourism must be a priority for
co-operation. 'Good practices' in conserving culture and nature while developing sustainable tourism
should be collected worldwide, involving all stakeholders. This process should lead to a
multi-stakeholder round-table on strategic planning of local community involvement in tourism to be
organised by UNEP as a side event at the Preparatory meetings for Earth Summit III in 2002.
49. There is an urgent need to assess the impacts of globalisation and the role of multilateral and
bilateral development organisations in unsustainable tourism practices. An independent international
assessment commission should be created under the CSD. NGOs, indigenous peoples, women's
organisations and local communities should be involved in this assessment process together with all
other stakeholders. The UN Working Group on Indigenous Peoples should be invited to monitor
impacts of tourism on indigenous peoples and local communities. The assessment is to be completed
and published by the year 2002.
E. Coastal Impact of Tourism
Problems
50. The United Nations Commission on Sustainable Development in 1999 will address both Oceans
and Seas and the review of SIDS. Therefore, it is recognising that: "The survival of small island
developing States is firmly rooted in their human resources and cultural heritage, which are their most
significant assets; those assets are under severe stress and all efforts must be taken to ensure the central
position of people in the process of sustainable development." With these words, the Report of the
Global Conference on the Sustainable Development of Small Island Developing States identifies the
single most important issue to be borne in mind as we address the challenge of survival and
development for our islands.
51. Article 25 of the Programme of Action from the United Nations Conference on the Sustainable
Development of Small Island Developing States (SIDS) focuses our attention on another significant
consideration: "Sustainable development in small island developing States depends largely on coastal
and marine resources, because their small land area means that those States are effectively COASTAL
ENTITIES"
52. Tourism is one of many anthropogenic activities with a special focus on coastal areas. The two
most popular locations for holidaymakers are the mountains and the coast. The coastal area or zone (as13
it is often called) is hard to define as the area where fresh and salt waters mix, containing many
complex, diverse and productive ecosystems on and offshore interacting with each other. New concepts
including the whole watershed area seem to be the best approach, especially when aquatic pollution
problems are considered. Most problems are related to conflicts between different uses and access
restrictions. Tourism leads to increased traffic flow and overcrowding in already densely populated
areas. Up to 130 tourists has been calculated per inhabitant in the most popular coastal regions.
Therefore, tourism adds substantially to the following pressures:
· Pollution by waste water, garbage, heating, noise and traffic emissions;
· Encroachment of buildings, facilities and roads close to the coastline;
· Beach erosion due to building, dune removal and dredging;
· Excessive use of natural areas;
· Destruction of natural areas to accommodate tourism or other needs;
· Inter-sectorial competition and conflict over (marine and terrestrial) space;
· Exclusion of local communities from any role of significance in decision-making;
· The loss of natural and architectural heritage in the face of rapid expansion;
· Strain on public utilities and facilities;
· displacement of local population;
· Creation of restricted exclusive zones that are off-limits to the local people;
· Loss of business by local enterprises as all-inclusive resorts supplies all the needs of their
guests.
53. Additional typical tourism impacts are socio-economic conflicts as property and general costs of
living increases, and social structure can be changed significantly, when summer guests overrun small
communities. Foreign customs and expectations can create conflicts and a deterioration of cultural and
regional values.
Solutions
54. A major focus should be on the integration of tourism planning and operation of tourist facilities
into local planning instruments. Local agenda 21 can play a key role here in ensuring the involvement
of all stakeholders. Ideally, this would be done in the context of integrated coastal area management
(ICAM). This instrument bridges sectorial approaches in order to avoid or mitigate user conflicts, and
it ideally takes into account ecosystem features and physical, not man-made borders. New tourism
developments should be planned together with municipal, industrial, agri- / aqua-cultural and nature
protection activities, to allow for multiple complementary uses and to segregate conflicting activities.
Area development plans should inform sector plans which should then be incorporated into a coordinated national development plan. All planning should be accompanied by widespread public
information dissemination and provide opportunity for discussion leading to integrated coastal zone
management. The tourism development strategy should protect local culture, respect local traditions
and promote local ownership and management of programs and projects, so as to foster community
stewardship of the natural resource base. Environmental Impact Assessment (EIA) on a strategic level
as well as for projects is an invaluable tool for this stage. Criteria for planning and EIA should be:
· Strict environmental standards for solid, liquid and gaseous waste emissions;
· Taking the integrity of coastal values and resources into account;
· Enhancement of public transport infrastructure (train, boat, bike, bus);
· Locally adapted styles and maximum height/size limit for facilities;
· Setting of local/regional carrying capacities on a case-by-case basis;
· Limits to sale of property to foreigners;
· Maintenance of public access to the coastal strip;
· Safeguarding cultural values and customary uses.14
55. During the operation of tourism facilities, several instruments can be applied to enable sustainable
development. The details have to be developed according to the use, and together with the local
community, the facility operator and local NGOs. Local Agenda 21 could play an important role here
(They will be different for a diving site than for a big hotel complex). Modern instruments, which
should be, and partly are, already applied in the tourism industry are:
· Introducing environmental management, (according to ISO 14.000 or the European EMAS
Initiative);
· Increasing cultural and nature awareness of guests through interactions with local
initiatives, guided nature walks, museums, etc.;
· Integrating the local economy by giving priority to local produce (e.g. fish, fruit, vegetables,
furniture, and building materials).
56. However, all these efforts will be in vain, unless carrying capacity limits can be agreed upon in a
dialogue and on a case-by-case basis. These limits have to follow sustainability criteria and have to
come out of discussions on the development objectives and the natural and cultural values to be
protected. They can be tiered in respect to nature used, number of beds and other facilities for guests,
and amount of property to be sold to foreigners. (But management efforts for sustainable development
cannot allow an ever increasing growth, which will destroy and, in fact already has, the resources the
guests have come to see and experience.) To diminish conflicts a better use of facilities over the year,
instead of only in a short season of two to three months should be aimed at. These limits probably have
to be stricter for "nature use". Here the introduction and implementation of ranger and guide systems
together with limits, regarding the number of visitors, can lead to increased awareness and control at
the same time. A simple example is the different approaches to beach litter: Instead of excessive beach
cleaning of all organic matter, a plastic litter clean-up by volunteers plus hands-on teaching on the biota
originally inhabiting the beach and its natural detritus (like algae and wood) could reinstate an
appreciation of nature.
57. We also believe that the recommendations for action at the national, regional and international
levels have been detailed in the SIDS Program of Action (1994), at the CTO Conference on Ecotourism in Dominica (1997) and more recently in the CEP Technical Report No. 38(1997) need to be
implemented.
Agents and Partnership for Change
Institutional Actions
58. Actions on several levels are necessary. First and foremost, the historically grown sectorial
approach to managing coastal issues, relating to tourism and other uses, has to be changed substantially.
Under the lead of one coastal agency, all stakeholders, especially local people and NGOs, and also
sectorial agencies, small and medium enterprises and industry representatives should meet regularly
to promote sustainable development of their coastal area. The planning process and the operation of
tourism developments should reflect the country's commitment to the guidelines set out in international
accords such as Agenda 21 and the SIDS Program of Action. Depending on the region, this could mean
enhancing human resource development including public awareness building and training; institutional
strengthening and networking. Lessons learned in one community should be accessible to others. This
will start the ICAM process, which is a goal-directed planning and decision- making process. ICAM
leads to inter-agency and inter-sectorial collaboration, resulting in operational decision-making with
strong public participation and feedback mechanisms. ICAM could mean in practice:
· To start an environmental management initiative through an award scheme;
· To raise an environmental tax from visitors for small projects, e.g. for funding ranger;
· Training or environmental training for tourism staff;
· To start joint actions with local fishermen, farmers, hotels, or other local initiatives;
· To develop a tourism master plan for the region.15
59. In the long term, a development plan should be devised and discussed thoroughly in order to
achieve a common understanding on the objectives and necessary restrictions. As all coastal areas
contain particularly sensitive sites, environmental protection has to feature strongly in this planning
process, with representatives from government nature protection agencies and NGOs having an equal
standing with all other participants. Depending on the nature of the coastline, regional and
intergovernmental collaboration may be necessary in addition to local initiatives. For some issues, such
as the reduction of pollution and especially “eutrophication”, co-operation on a larger regional scale
is necessary. Maybe the Baltic Sea States, consisting of very poor and rich states (can serve as example)
are co-ordinating their fight against pollution under the Helsinki Convention, funding projects in
neighbouring countries according to a list of hot spots. They have just finished the development of a
joint Agenda 21 for the development of the Baltic region, including tourism. Generally, national plans
should be converted into area development plans, which would provide the local context within which
enterprise-level proposals can be evaluated. All these plans should inform and be incorporated into
wider regional plans.
60. As integrated processes take time, tourism umbrella organisations should start with voluntary selfrestraint, until locally adapted objectives have been reached. In the north, which bears the brunt of
world-wide tourism, a development of quality tourism should be the focus for the future instead of an
increase in quantity. The term quality should include ecological and social carrying capacities at the
same time as being economically sustainable. In the south, tourism development objectives should be
developed according to the local needs. A specially developed Code of Conduct, taking into account
inter-area, the Coastal Code of Conduct by EUCC and the Berlin Declaration on Biological Diversity
and Sustainable Tourism, could lead the way. Environmental management should become a standard
of operation as well as social accountability thus leading to sustainable development.
Possible Partnerships
61. Additional to those partners mentioned above, there is a major role for environmental and social
NGOs to play. The involvement of local initiatives, heritage and nature protection organisations and
agencies can lead to a balanced ICAM process in the spirit of the Agenda 21.
62. Umbrella organisations, such as scuba diving, boating, and yachting associations should develop
and promote the application of codes of conduct focussing on environmental and sustainability issues
in their respective fields.
63. The Convention on Biological Diversity contains an ecosystem approach, which is consistent with
the ICAM logic. Its experts could sensibly focus on questions of nature use and ecological carrying
capacities for sensitive sites in order to obtain harmonised world-wide standards with legal standing.
64. The instruments and strategies are all already developed, now is the time to utilise and combine
them in local dialogue processes.
PPT Working Paper No. 12
Tourism in Poor Rural Areas
Diversifying the product and expanding the benefits in rural
Uganda and the Czech Republic
Jenny Holland, Michael Burian and Louise Dixey
January 2003 1
PPT Working Paper Series
9 Strengths and Weaknesses of a Pro-Poor Tourism Approach, Results of a Survey to
Follow-Up Pro-Poor Tourism Research Carried Out in 2000-2001, by Dorothea Meyer
10 Methodology for Pro-Poor Tourism Case Studies, by Caroline Ashley
11 Strategies, Impacts and Costs of Pro-Poor Tourism Approaches in South Africa by Anna
Spenceley and Jennifer Seif
12 Tourism in Poor Rural Areas: Diversifying the Product and Expanding the Benefits in
Rural Uganda and The Czech Republic, by Jenny Holland, Louise Dixey and Michael Burian
13 Coping with Declining Tourism, Examples from Communities in Kenya, by Samuel
Kareithi
14 Addressing Poverty Issues in Tourism Standards, by Dilys Roe, Catherine Harris and Julio
de Andrade
15 Improving Access for the Informal Sector to Tourism in The Gambia, by Adama Bah, and
Harold Goodwin
16 Tourism to Developing Countries: Statistics and Trends, by Dorothea Meyer, Dilys Roe,
Caroline Ashley and Harold Goodwin (forthcoming)
17 Outbound UK Tour Operator Industry and Implications for PPT in Developing
Countries, by Dorothea Meyer
These working papers, produced under the title 'Lesson-Sharing on Pro-poor Tourism', are the result of a collaborative
research project carried out by the PPT Partnership. The PPT partnership is comprised of Caroline Ashley (ODI),
Harold Goodwin (ICRT) and Dilys Roe (IIED). They are funded by the Economic and Social Research Unit (ESCOR)
of the UK Department for International Development (DFID). 2
Contents
1 Introduction ................................................................................................................................3
2 Importance and challenges of tourism in rural areas.............................................................5
3 Different approaches to rural tourism .....................................................................................9
3.1 Agri-tourism, farm tourism and rurally-located tourism......................................................9
3.2 Policy motives: rural growth, tourism product development.............................................10
3.2.1 Rural tourism as a motor of growth .......................................................................10
3.2.2 Rural tourism to enhance or protect the tourism product.......................................11
4 Promoting rural tourism in the Czech Republic ...................................................................12
4.1 Tourism economics and policy post 1989..........................................................................12
4.2 The context of a transition economy ..................................................................................13
4.3 Initiatives to develop rural tourism ....................................................................................14
4.3.1 An initial project to lay the groundwork................................................................14
4.3.2 Heritage Trails (HT)...............................................................................................15
4.3.3 Materials and standards for rural tourism products ...............................................17
4.4 Progress, challenges, impacts, and critical factors .............................................................18
4.4.1 Progress and challenges .........................................................................................18
4.4.2 Key obstacles and ingredients of success ..............................................................21
5 Development of rural tourism through Heritage Trails in Uganda ....................................23
5.1 Background: tourism trends; policy and rural tourism objectives .....................................23
5.2 The Heritage Trails Initiative .............................................................................................24
5.3 Progress, challenges, impacts and key factors ...................................................................28
5.3.1 Progress and challenges .........................................................................................28
5.3.2 Obstacles and success factors ................................................................................31
6 Implications for Developing Rural Tourism..........................................................................33
6.1 Key Issues...........................................................................................................................33
6.2 Can rural tourism contribute to poverty reduction? ...........................................................35
References .........................................................................................................................................37
List of Tables
Table 1: The gap between requirements of tourism and characteristics of rural areas ........................7
Table 2: Growth of Tourism in the Czech Republic 1991–2000 .......................................................13
Table 3: Number of guests identifying accommodation through ‘A Countryside Holiday
Guidebook’...........................................................................................................................18
Table 4: Community associations and attractions on the Kabaka‘s Trail..........................................26
Table 5: Heritage Trails Uganda Project Activities ...........................................................................26
List of Boxes
Box 1: ECEAT CZ – European Centre for Eco Agro Tourism..........................................................12
Box 2: Heritage Trails ........................................................................................................................16
Box 3: Making a Heritage Trail .........................................................................................................17 PPT Working Paper 12 Tourism in Poor Rural Areas
3
1 Introduction
As many as 75 per cent of the world’s poor live in rural areas
1
,Top tourism destinations .
particularly in developing countries, include national parks, wilderness areas, mountains, lakes, and
cultural sites, most of which are generally rural. Thus tourism is already an important feature of the
rural economy in these specific sites. It is self-evident that tourism will never come to dominate all
rural areas, particularly in the developing world – there are vast swathes of rural areas for which
tourism is not relevant for the foreseeable future. Between these two extremes are poor rural areas
with some tourism potential, and an urgent need to develop whatever economic potential they have.
Thus, an important question is whether more can be done to develop tourism within such rural
areas, as a way of dispersing the benefits of tourism and increasing its poverty impact.
The aim of Pro-Poor Tourism (PPT) is to increase the net benefits to poor people from tourism, and
increase their participation in managing the tourism product. If more tourism can be developed in
rural areas, particularly in ways that involve high local participation in decisions and enterprises,
then poverty impacts are likely to be enhanced. The nature of rural tourism products, often
involving small-scale operations and culturally-based or farm-based products, can be conducive to
wide participation. Tourism can also bring a range of other benefits to rural areas, such as
infrastructural development and spin-off enterprise opportunities. This paper thus assumes that
strategies to further develop rural tourism can be one part of a pro-poor tourism agenda.
However, developing rural tourism has its challenges. Any successful tourism development,
whether pro-poor or not, depends on commercial, economic, and logistical issues, such as the
quality of the product, accessibility and infrastructure of the destination, availability of skills, and
interest of investors. In most of these aspects, rural areas may well be at a disadvantage compared to
urbanised and more developed areas. These challenges may be compounded by political and
institutional obstacles, particularly in developing countries, i.e. the administrative complexity of
dealing with low-populated areas, the lack of policy co-ordination between rural development and
tourism development, and low priority provided to rural areas by central governments. Thus, ways
to deal with these challenges are needed.
Rural tourism takes many different forms and is pursued for different reasons. There are
developmental reasons to promote tourism as a growth pole such as for regeneration following
agro-industrial collapse, or diversification of a remote marginal agricultural area into adventure
tourism or cultural tourism. Other reasons relate more to development of the tourism product such
as diversifying a country’s image, or alleviating bottlenecks in popular sites. There are big
differences in approach between Eastern Europe and Africa (the two areas of focus in this paper)
due to their economic legacy and context. But in both, rural tourism is seen as one means to assist
rural economies with the transitions they are facing in order to thrive in a more liberalised economy.
The purpose of this paper is to explore strategies for expanding tourism in poor rural areas. It draws
on an overview of the likely challenges and motivations involved in promoting rural tourism, and
on two new case studies from the Czech Republic and Uganda, complemented by insights from
other rural tourism initiatives elsewhere. It does not focus on rural tourism at well-established or
high-value sites (such as gorilla habitat, famous mountains or reserves), but on bringing tourism
into wider rural areas.
1
IFAD (2001:15) estimates that 75% of the 1.2 billion people living on less than one dollar a day live and work in rural areas.PPT Working Paper 12 Tourism in Poor Rural Areas
4
Section 2 outlines the importance and likely obstacles of rural tourism, thus sets out the key
challenges on which practical lessons are needed. The paper does not seek to provide a
comprehensive review of international experience of rural tourism approaches, but Section 3 briefly
provides some key background on different types of approaches, thus providing distinctions and
definitions for the discussion. In particular, it outlines the differing context for rural tourism
strategies in Eastern Europe and sub-Saharan Africa.
Section 4 reviews initiatives in the Czech Republic to establish Heritage Trails, focusing initially on
Southern and Northern Moravia, while Section 5 reviews the development of cultural sites and trails
in Ugandan villages in the traditional kingdom of Buganda. The motivations, institutional
processes, practical steps, progress and obstacles are identified. The final section returns to the
themes of challenges and strategies in order to identify useful lessons for pro-poor tourism
strategies more generally. This paper does not provide an economic and social impact assessment of
the development of rural areas into a tourism destination. While such an assessment is urgently
needed, considerable new research is required to inform it
2
.
2
This is an important gap in our knowledge of rural tourism and pro-poor tourism. Most assessments of the impact of tourism in the
development literature focus either on the macro level (for example at national level on contribution to foreign exchange or total
employment), or on the micro level (for example, impacts of one lodge or one enterprise). Given that the ‘destination’ is the key level
at which development takes place and impacts are maximised in tourism, destination level assessment is needed to understand
poverty impacts. PPT Working Paper 12 Tourism in Poor Rural Areas
5
2 Importance and Challenges of Tourism in Rural Areas
Rural areas are heterogeneous. The definition of a rural area is problematic in the literature – most
people know a rural area when they see one, but few agree on a definition in a few sentences.
Debates aside, common features of rural space are (Ashley and Maxwell 2001):
• spaces where human settlement and infrastructure occupy only small patches of the landscape,
most of which is dominated by fields and pastures, woods and forest, water, mountain and
desert
• places where most people spend most of their working time on farms
• abundance and relative cheapness of land
• high transaction costs, associated with long distance and poor infrastructure
• geographical conditions that increase political transaction costs and magnify the possibility of
elite capture or urban bias
For the purposes of this paper, key features that make rural areas relevant to pro-poor tourism
development are their poverty and lack of economic opportunity, combined with the agricultural
and/or scenic and/or cultural nature of the area, which provides a tourism asset.
The aim of ‘pro-poor tourism’ is to increase the net benefits to poor people from tourism, and
increase their participation in the development of the tourism product. From this perspective, there
are three main reasons why it is important to develop tourism in rural areas:
i. Increase participation of the poor in the development of tourism
While the percentage of poor people in urban areas is increasing, there are still more in rural
areas
3
, both in total numbers as well as a proportion of the population. One key opportunity of
involving more of the poor in tourism is to develop tourism enterprises where they live. This is
not to say that the poor will necessarily own an enterprise, or even provide the labour, just
because it is located in a rural area, but location is a first step. Furthermore, two strengths of
tourism for increasing participation are that a) because the customer comes to the product (not
vice versa), there are more opportunities for expanding the range of transactions; and b)
tourism usually involves a wide range of enterprises, i.e. the small and informal as well as the
well-established or multi-national (Ashley, Goodwin and Roe 2001). One advantage specific
to rural tourism is that the nature of the product often involves enterprises that feature local
ownership such as bed and breakfasts (B&Bs), home visits and farm stays.
ii. Bring wider benefits to rural areas
Rural areas generally suffer high levels of poverty, and are also characterised by lower levels
of non-farm economic activity, infrastructural development, and access to essential services.
They may also suffer from depopulation of the able-bodied
4
, and lack of political clout.
According to Gannon (1994) and Kieselbach and Long (1990) the development of tourism can
help address several of these problems through:
3
Although poverty is becoming urbanised, it is estimated that the majority of the poor of developing countries will be in rural areas
until at least 2020. IFAD projects that over 60% of the poor will be rural even in 2025 (IFAD, 2001: 15)
4
Depopulation refers to young, skilled workers moving out, to leave a largely unskilled, elderly population in the rural area. It is a
critical issue in much of Eastern Europe, and in many sub-Saharan African countries. PPT Working Paper 12 Tourism in Poor Rural Areas
6
• economic growth, economic diversification and stabilisation;
• employment creation, as primary source of income but most importantly secondary source
of income;
• reduced out-migration and possibly re-population;
• maintenance and improvement of public services;
• infrastructural improvements;
• revitalising crafts, customs and cultural identities;
• increasing opportunities for social contact and exchange;
• protection and improvement of both the natural and built environment;
• increasing recognition of rural priorities and potential by policy-makers and economic
planners
5
.
iii. One option among few
Manufacturing industry gravitates to areas with good transport links, infrastructure, and
commercial skills. Rural areas usually have few sources of comparative advantage for
attracting economic activity other than agriculture or industries based on harvesting natural
resources (mining, forestry) (Wiggins et al. 2001). Tourism is one of the few sectors that can
be suitable to remote or non-urban areas, provided that there is sufficient access for tourists.
Because there are few other options, its value to the poor can be particularly high
6
.
As outlined in the next section, the combination and form of these different benefits varies
enormously between places. However these and other reasons mean that expanding tourism into
new rural areas can make policy sense. There are also practical reasons why doing so may appear to
be a relatively ‘easy’ option. The nature of rural tourism products and clientele may mean that
relatively basic facilities suffice, which are easier to develop than high quality resorts. There may
well be assets in rural areas (man-made structures, culture, nature) that can be readily adapted for
tourism development.
Tourism development can also have negative impacts on residents. In rural areas, displacement of
people from their land and competition for other natural resources such as water, forest, and wildlife
are likely to be the key trade-offs. Pro-poor strategies should therefore focus on minimising
negative impacts as well as exploiting potential benefits.
However, any assessment of the key features of successful tourism development, and the key
characteristics of rural areas leads to the hypothesis that developing tourism in rural areas faces
major obstacles. Table 1 lists some of the requirements of tourism, and shows how rural areas may
be less likely than urban areas to be able to meet most of them.
5
Nicanor (2001), reviewing community-based tourism in Namibia identifies that community based organisations play a vital role in
lobbying and advocacy, thus providing a voice for marginalised groups. The low political priority afforded to rural areas may be
more of a problem in developing countries, where farming has traditionally been taxed to support the urban classes and modern
sectors, than in Europe, including Eastern Europe, where rural and agricultural issues often gain considerable political support.
6
As identified in earlier PPT case studies in Amazonian Ecuador ( Braman and Fundación Acción Amazonia 2001) and Namibia
(Nicanor 2001). PPT Working Paper 12 Tourism in Poor Rural Areas
7
Table 1: The gap between requirements of tourism and characteristics of rural areas
Common requirements for tourism
development
Common characteristics of rural areas
• A product, or potential product • Variable. May have a high-value unique selling
point, may be an attractive desired location for
travellers from cities, may have little to offer.
• Access – transport infrastructure, limited
distance, limited discomfort
• Distant from cities, poor roads, few
trains/buses/planes
• Investment in facilities • Limited access to financial capital, affordable
credit and private investment.
• Skills in service, hospitality • Low skills (skills migrate)
• Regular and quality inputs, e.g. of food
and other supplies
• Undeveloped commercial production, distant from
markets
• Marketing skills • Distant from marketing networks
• Clustering of tourism products to create a
‘package’ holiday
• Lower concentration of tourism products in one
place
• Government investment • Low priority for governments, particularly
tourism/trade ministries, particularly in subSaharan Africa
While it is possible to highlight a number of obstacles that are common to rural areas, this is not the
case when considering the tourism attraction itself. Some rural areas have such strong products,
such as mountain gorillas, well-endowed wildlife areas, stunning wilderness, that the quality of the
product can compensate for other problems, and act as an incentive for the industry and tourists to
overcome them. Others areas, however, may be characterised by vast expanses of agricultural land
(perhaps marshy or highly arid), be topographically featureless, and lacking distinctive cultural
and/or historical features. These areas are unlikely to develop a successful product even if the other
obstacles are addressed, unless a well-resourced private or public investor spots an opportunity
7
.
But for many rural areas, developing rural tourism will require a combination of developing an
attractive product, and overcoming the other challenges, such as accessibility and availability of
skills. Good marketing and fast transport links can turn a pleasant area into a popular short-break or
excursion destination.
Most of the obstacles listed above are commercial, economic and logistical. They can be addressed
through investment of time and resources, although it cannot be done everywhere. However the
institutional and political problems are important to note, as they can assume great importance in
rural areas. Although tourism today is generally a private-sector industry, a degree of government
support, in terms of investment, appropriate regulation and marketing, can be key. In some
countries rural tourism is already well recognised by policy makers as an important economic
strategy. In others, particularly in Africa, support for tourism in rural areas may be limited because:
• Where tourism is planned within a tourism ministry, or a tourism and wildlife ministry, the
institutional mandate is likely to be in expanding the national tourism product, rather than
the growth potential of poor areas. Thus the focus is more likely to be on attracting
investment, developing the main destinations, marketing them, and often also on data
gathering. If the policy objective is expansion of tourism investment and arrivals,
particularly of international tourism, the fastest returns may come from a focus on existing
resorts and urban areas, where tourists, assets and skills are concentrated. That said, there
7
It is not impossible to develop a standard area, or even an unattractive one, into a product with sufficient investment. Sun City, the
most popular resort in South Africa, is a ‘creation’. Cancun was built in a mosquito–infested swamp. While these attractions receive
large amounts of visitors, i.e. 40% of international arrivals to Mexico visit Cancun, they are exceptional and highly geographically
concentrated developments. PPT Working Paper 12 Tourism in Poor Rural Areas
8
may be commercial reasons to invest in rural products, such as product diversification, or
political pressure to expand economic impacts to poor areas (see Section 3).
• Rural development planners and extension workers are unlikely to focus on tourism, which
is entirely alien to their agriculturally-focused professional training
8
.
• Lack of communication between government departments, or inconsistencies between
policies, that occur in the capital city can be greatly magnified in rural areas. Administrative
boundaries, reporting structures and mandates can impede collaboration.
• Rural areas may have little political priority across government offices, not just in the
tourism ministry. Given the added costs of investment in rural areas, and the lower per
person returns given lower population density, a policy to redistribute resources to rural
areas is likely to require a strategic political choice (Start 2001).
• Even if political will is sufficient, there are administrative challenges to making things
happen in rural areas given lower population densities, poorer infrastructure, more junior
government staff, lower levels of skills and commercial activity.
The situation may be quite different in some countries, particularly in Europe, where tourism is
more often under the Ministry for Economic Affairs, and where the main mandate is 'growth' in
addition to the other cornerstones of economic development. At the same time tourism planning and
development in rural areas often falls within the Ministry for Rural Affairs, or under decentralised
government bodies (Federal States, Counties) which combine rural planning and tourism planning.
Thus while the National Tourism Boards have a marketing mandate, planning happens elsewhere
with a clearer growth and/or rural development focus.
Thus in reviewing the experience of the Czech Republic and Uganda, the paper aims to identify
how the different institutional, commercial, and logistical challenges have been dealt with, and how
the various benefits have been pursued. More specifically, several advantages of, and challenges to,
rural tourism have been hypothesised. Have these advantages and challenges been encountered in
the case studies? Given that at this stage we can learn more about the process than the impacts, key
questions to ask of the case studies are how they have dealt with potential obstacles and how they
have:
• developed the rural product
• ensured sufficient quality of facilities and inputs
• developed marketing capacity and increased visitor numbers
• dealt with other practical challenges such as accessibility of transport, availability of credit or
investment
• built institutional capacity and sufficient political support to resource and develop rural tourism
8
A case study from the north of Selous Game Reserve, in Tanzania, argues that wildlife tourism and its contribution to rural
livelihoods is below potential, partly due to lack of articulation between those with tourism, rural development and conservation
mandates (Ashley, Mdoe and Reynolds 2002 ). PPT Working Paper 12 Tourism in Poor Rural Areas
9
3 Different Approaches to Rural Tourism
This section makes some distinctions between different types of rural tourism and policy objectives
relating to them. It lays the basis for understanding the objectives and contribution of the two case
study initiatives, taking place in the different contexts of Eastern Europe and sub Saharan Africa.
3.1 Agri-tourism, farm tourism and rurally-located tourism
Rural tourism can be taken to mean farm tourism or agri-tourism, but both are sub-components of
tourism in rural space:
• Agri-tourism is when the purpose of the visit has a specific agricultural focus such as being with
animals, enjoying a vineyard.
• Farm tourism is when accommodation for rural tourists is provided on farms. The core activity
is in the wider rural area (walking, boating) but the vast majority of visitors are accommodated
on farms, either working farms or farms converted to accommodation facilities.
• Rural tourism, or rurally-located tourism, can include the above but also campsites, lodges,
safari drives, craft markets, cultural displays, adventure sports, walking trails, heritage sites,
musical events indeed any tourist activity taking place in a rural area.
In Europe, farm tourism plays an important role in rural tourism. For example, in some rural areas
in East Germany (an example being Wittow on the island of Rügen), 80 per cent of accommodation
is provided by working farms or farms that have been converted to accommodation facilities. In
African rural areas there are some commercial guest farms and the emerging equivalent of home
stays in traditional huts, but tourists often stay in purpose-built tourism accommodation (from
luxury lodges to campsites) while visiting rural areas.
There is evidence that farm tourism generates proportionately higher benefits than other tourism
using purpose-built accommodation in a similar area
9
However, the relative benefits and also the .
costs of adapting farms for tourism purposes have often been evaluated incorrectly. The investment
required to upgrade facilities can be high, and so can the marketing investment to service a number
of fragmented non-experienced part-time entrepreneurs. Returns can be low given low occupancy
rates and high seasonality.
Poland’s experience since the early 1990s provides a case in point: rural farm-based tourism was
seen as a cheap form of tourism that would utilise existing spare capacities in farm houses and
small, unsophisticated catering facilities. However, investment needed was grossly underestimated
(McMahon 1996), given that tourists demand creature comforts including adequate sanitary
facilities. This was a high investment burden for generally small-scale farmers. Furthermore,
marketing costs and the set-up of marketing networks co-ordinating a large number of small-scale
entrepreneurs were added expenditures that were initially not foreseen. As a consequence farm
tourism was far from a cheap option as was initially thought. Although rural tourism in Poland is
thriving, the government has realised that the returns are very low and that a main constraint is the
large number of small-scale stakeholders that need to be co-ordinated and marketed (MacMahon
1996).
9
A study by Slee, Farr and Snowdon (1997) analysed the impacts of soft tourism (tourism accommodation provided by locals in for
example farms) and hard tourism (accommodation provided by externals such as time-share companies) on the local rural economy
in Scotland. They found that a much higher proportion of expenditure remains locally or in surrounding areas when soft tourism
providers are used (68.5% of expenditure), compared to hard tourism providers (only 25.3% of expenditure remains in the local or
extended area). PPT Working Paper 12 Tourism in Poor Rural Areas
10
3.2 Policy motives: rural growth, tourism product development
3.2.1 Rural tourism as a motor of growth
Strategies to use tourism as a motor of growth in rural areas emerge in different contexts. They are,
at heart, about enabling rural producers to reduce reliance on agriculture, and engage in new
economic opportunities that are competitive in the more globalised markets, which now reach their
doorstep (or farm gate). In Eastern Europe, the emphasis has been more on tourism as a tool for
rural regeneration following agricultural collapse, while in Africa, the emphasis is more on
diversification of under-developed areas.
Regeneration in the face of agricultural decline
In Europe, tourism has long been considered a catalyst for regeneration of rural areas, particularly
where traditional agrarian industries are in decline (Williams and Shaw 1998, Hoggart, Buller and
Black 1995). Studies of rural tourism are predominantly set within a European (including Eastern
European) or North American context, focusing largely on domestic visitors and economic
restructuring. Farm facilities and infrastructure (such as basic transport) are in place, thus the
strategy is to adapt them for tourism purposes, market the rural attractions, and draw clients,
particularly domestic visitors, from the cities. There is evidence that in Europe rural tourism has
made important contributions to rural incomes both at the level of the individual farmer and more
widely in the local community (ETB 1991). While not necessarily substituting for agricultural
income, it has delivered supplementary income and inter-sectoral linkages.
This approach to rural tourism has received priority attention in Eastern Europe since the fall of the
iron curtain and the collapse of communism. The need for rural regeneration has been immense. In
the early 1990s countries in Eastern Europe needed to respond quickly to previously unknown
circumstances: high levels of industrial closure, a loss of Soviet-controlled markets, break down of
the non-competitive and over-staffed agricultural sector and consequently high unemployment,
price inflation and diminishing living standards. High unemployment due to privatisation of largescale agricultural co-operatives, coupled with a new freedom to move to urban centres severely
depopulated rural areas. At the same time the level of domestic travel was seriously reduced due to
financial constraints, a thirst for the outside world, and loss of financial subsidies for previous forms
of 'social' tourism. Interregional travel, on which former Eastern Bloc countries depended heavily,
was reduced to a minimum.
At the same time, interest by Western visitors in previously unseen countries and attractions
increased drastically. The early 1990s were characterised by large-scale, short-stay tourism,
especially from Germany, to formerly closed-off countries such as the Czech Republic. Although,
the overwhelming demand was initially for urban destinations, such as Prague, rural tourism made
sense since Eastern Europe is generally more rural than Western Europe (in terms of levels of
urbanisation, and socio-cultural characteristics). Rural areas in the East should be able to offer an
appealing product to the West if appropriately developed and promoted. Furthermore, rural areas
were in dire need of regeneration and means to operate in a market economy.
Rural diversification of under-developed areas
In developing countries, the language of policy-makers focuses more on diversification than
regeneration of the rural economy. In this context, the problem is not so much the structural
collapse of agriculture, but the insufficiency of agricultural livelihoods, and the search for new
sources of growth and economic opportunity. Smallholder farming is facing growing constraints PPT Working Paper 12 Tourism in Poor Rural Areas
11
(both in terms of local resource base and international competitiveness, Ashley and Maxwell 2001)
and cannot meet the needs of a growing population. The last decade has seen consensus that social
investment alone cannot reduce poverty, and that growth is essential. This applies equally to rural
areas, despite their lower comparative advantage; thus attention is crystallising on the dilemmas of
how to promote the non-farm rural economy (Start 2001).
In this context, tourism is promoted as a new activity, which is supplementary to agriculture.
Although building on existing assets where possible, it is not a matter of simply switching existing
infrastructure to a new purpose. New assets and infrastructure are invariably needed. Tourism is a
means of bringing the concomitants of economic development (infrastructure, communications,
services) to an under-developed area. There are of course some rural areas that have already been
transformed into ‘destinations’, sometimes involving depopulation of large parts in the process: e.g.
in Africa, the Massai-Mara in Kenya, the Ngorongoro Crater in Tanzania, the Okavango Delta in
Botswana and Kruger National Park in South Africa are well-known examples.
3.2.2 Rural tourism to enhance or protect the tourism product
Tourism development planners may share the growth objectives outlined above, or may be subject
to increasing political pressure to show their contribution to them. Even where tourism is run by a
separate ministry with its own agenda, demonstrating and expanding the impact of their industry
can be an important goal. A tourism ministry will have to demonstrate its contribution to national
development plans and to poverty targets, to compete for scarce government resources.
In addition, there are other reasons for promoting rural tourism that relate to development of the
tourism product, and this is quite different to the poverty-rooted objectives of promoting rural
development. These are nevertheless important motivations to understand as they influence wider
institutional support for rural tourism.
Enhancing the tourism product
An important objective for tourism planners is to diversify the tourism product (e.g. the
development of culture, adventure tourism) with the aim to encourage visitors to stay longer and,
ideally, spend more, and/or to develop a more distinguishable destination identity. These ‘new’
features of the rural product can provide the basis for a revised marketing programme (for example
bird-watching in Uganda). Such niche products may well be promoted in quite isolated rural areas,
sold as ‘off the beaten track’ rather than the more developed agricultural areas. Or they may be
proximate to cities and resorts, in order to provide add-on excursions. Thus they have relevance to
different types of rural areas.
Dispersion to protect tourism assets
Another objective of tourism managers, and one shared by conservation professionals, may be to
disperse tourists away from existing ‘honeypots’. There may be many good reasons to encourage
concentrations of tourism activity in one area – such as to limit negative impacts spreading more
widely, to take advantage of economies of scale, or optimise different land uses. But at times it
becomes necessary to take pressure off key sites, particularly if resources are being over-used or if
limits to capacity in peak season are being met. This requires dispersing tourists geographically,
including into surrounding rural areas. PPT Working Paper 12 Tourism in Poor Rural Areas
12
4 Promoting rural tourism in the Czech Republic
This section looks at initiatives undertaken by a non-governmental organisation to develop rural
tourism in the Czech Republic, in a fairly non-supportive policy environment. While the scale of
rural tourism resulting is fairly small so far, the process highlights many of the institutional and
practical challenges, with particular reference to a post-communist transition economy.
4.1 Tourism economics and policy post 1989
The early 1990s produced a boom in tourism for Prague, as the city’s architecture and rich culture
were ‘rediscovered’ by Western Europeans curious to visit a country formerly hidden behind the
Iron Curtain. The country’s struggle during the Prague Spring in 1968 and its charismatic leader,
Vaclav Havel’s role in that struggle, increased the fascination of the city as a tourist destination. As
a result, Prague became a synonym for the Czech Republic and the tourism boom brought US$ 4
billion per annum to the state budget (Czech Tourist Authority 2000) with almost no marketing and
promotion. While tourism revenue generated by Prague has been estimated at 60 per cent of total
Czech tourism earnings, the city captures over 80 per cent of the total earnings since many
companies are registered in Prague, although operating elsewhere.
In the early 1990s, tourism was the responsibility of the Ministry for Economic Affairs with the
overriding objective to facilitate economic development. Little attention appeared to be paid to
strategic development of a long-term, comprehensive tourism policy. Although the Czech Tourist
Authority was established, its budget was relatively limited, less than US$ 400,000 per annum. A
proposal made to the Ministry for Economic Affairs by the European Centre for Eco Agro Tourism
(ECEAT CZ) to develop alternative forms of tourism in rural areas was rejected on the basis that
‘alternative’ tourists were not ‘big spenders‘ and this would therefore not be an economically viable
market segment to develop (ECEAT CZ).
Box 1: ECEAT CZ – European Centre for Eco Agro Tourism
ECEAT CZ is an independent, non-profit, non-governmental Czech organisation. ECEAT CZ is a member of
the Europe-wide ECEAT network, ECEAT International
ECEAT CZ’s main aims are:
• to support sustainable rural development through small-scale, environmentally-friendly tourism
• to create new job opportunities for village people
• to enhance the experience and knowledge of village entrepreneurs (education, information, materials,
quality control etc.)
(source: www.eceat.org)
During the 1990s, the structure of tourism to Prague changed considerably. The first boom of
curiosity gave way to the cheaper end of the market, i.e. cheap package deals and student trips. At
the same time competition from other Eastern European destinations such as Budapest increased.
Although the number of inexpensive package arrivals continued to increase, total visitor numbers
started to decrease marginally by the late 1990s, and total revenue declined markedly. Coupled with
the increasing costs of maintaining and developing infrastructure, the ‘Prague product’ began to
falter. Table 2 illustrates the impressive growth (in terms of arrivals and income) until 1996
followed by a subsequent decline. PPT Working Paper 12 Tourism in Poor Rural Areas
13
Table 2: Growth of Tourism in the Czech Republic 1991–2000
1991 1992 1993 1994 1996 1998 2000
Foreign arrivals (million people) 51 69 72 101 109 103 104
Foreign exchange income ($US billion) 0.7 1.1 1.6 2.0 4.1 3.7 2.9
Source: Ministry of Regional Development, Tourism in the Czech Republic and Czech Tourist Authority, Annual
Report 2000
Notes: 1.Comparable statistics for years before 88-90 are not available 2. Tourists account for approx 50% of total
arrivals. 3. 1993 Czech and Slovak Republic separated
With problems emerging in Prague, and the European Union (EU) focusing on the economic
development of rural areas, the attention given to rural tourism increased towards the end of the
1990s. The ‘National Development Plan’ developed for the EU accession agenda, included a plan
for countryside development (‘Programme for Countryside Renewal’). One of the EU funding
criteria was that projects proposed under this plan had to be submitted by villages associations.
Most funding was directed towards basic infrastructure, e.g. sewage reconstruction. Tourism
development was initially just a small part of this programme, with cycle tracks being the main type
of investment. Other more immediate priorities dominated, and a lack of access to credit to renovate
or build new accommodation meant that small-scale tourism entrepreneurs were discouraged from
participating in the programme. Nevertheless, tourism was one element of the Countryside Renewal
Plan and since 2000 there has been an increasing trend to develop new products, in addition to
improving infrastructure. Furthermore, since 1996 theresponsibility for tourism development moved
from the Ministry of Economic Affairs to the Ministry for Regional Development.
4.2 The context of a transition economy
Prior to the collapse of communism, the service sector (and hence the tourism industry) in the
Czech Republic was weakly developed. The universal right to work, common to all ex-communist
countries, favoured employment in heavy industries and/or collective agriculture. Neither private
ownership of enterprises nor NGO activity was permitted.. As in the rest of Eastern Europe, since
the fall of the Iron Curtain in 1990 the economy underwent rapid transition, most notably the
collapse of the primary sector and consequently rising unemployment. Between 1980 and 2000, the
contribution of secondary industries to the GDP fell from 63% to 43%, while the contribution of
tertiary industries increased from 30% to 53% (EBRD STAS).
For rural workers access to new forms of employment was hampered by the reduction, or absence,
of previously subsidised transport. Even with new foreign investment, salaries remained low with
the additional burden of non-subsidised transport costs. For many, paid employment offered lower
remuneration than unemployment benefits. This lead to resentment and frustration in rural areas.
In Hungary, the most open of the Eastern Bloc countries in the 1970s and 1980s, a basis for tourism
and entrepreneurship had already been laid. Despite the general collectivist ideology of
communism, in some sectors of the economy, including tourism, individual ownership and
entrepreneurship were permitted under 'market socialism'. Foreign investment, ownership, and joint
ventures were allowed, and western tourism facilities were developed. As a result, the country
emerged as one of the leading destinations for West Europeans in the 1990s.
The Czech experience has been very different, resulting in two different but important implications
for tourism development. Firstly, there was no basis of private entrepreneurship in tourism. Private
ownership was not permitted during the ‘communist’ years, leading to the absence of
entrepreneurial skills and also the complete lack of private investment capital. Thus, the creation of
local quality products became a challenge. Secondly, there was a very strong feeling against the PPT Working Paper 12 Tourism in Poor Rural Areas
14
notion of ‘partnerships’, or working together as embodied in collectivism, in the Czech Republic
when the Soviet control broke up. New found, and permitted, individualism, a new competitive
environment, and the legacy of state control using fellow citizens, lead to an initial distrust of both
fellow members of society and the state. Degrees of mistrust also had particular implications for
rural tourism, given the co-ordination issues that emerge in product development and marketing.
Rather than collaborating on product development and marketing, the neighbour was seen as the
‘competitor’.
4.3 Initiatives to develop rural tourism
Despite the Ministry of Economic Affairs’s initial rejection, ECEAT CZ decided to continue to
push for the development of tourism in rural areas. Since 1995, four different (though overlapping)
approaches have been taken to achieve this:
• An initial programme from 1995 to 1998, ‘Tourism at the Service of Rural Development’
(TSRD) to start building capacity, skills and products;
• A project to develop ‘Heritage Trails‘ in rural areas, from 1998 to 2000;
• Production of a rural tourism guidebook and other materials;
• On-going political engagement, including further expansion of the Heritage Trail materials and
approach.
4.3.1 An initial project to lay the groundwork
Tourism at the Service of Rural Development (TSRD) started in 1995 and had three sub-themes:
Institutional Capacity, Training in Tourism Skills and Product Development.
Institutional capacity: The first step in the project was to develop an understanding of the needs,
strengths and weaknesses of all potential partners (government, private sector and civil society) in
implementing a long-term tourism strategy. Capacity building was carried out in five regions, all of
which were later to develop Heritage Trails. This involved a series of one-day motivational
seminars
10
exploring the potential for partnerships between local governments, entrepreneurs and
NGOs. This focused on the understanding of potential mutual benefits arising from joint action, and
hence changing attitudes towards adopting sustainable rural tourism development. The seminars
formed the basis for co-operation and supported the Heritage Trails initiative when it started in
1998.
Training in tourism skills was initiated to serve two aims, a) to increase the quality of service
provision and b) to raise tourism awareness. It was felt that residents of Czech villages were both
suspicious towards outsiders and as well as unaware of the tourism potential of their surroundings,
and thus uncertain about proposed tourism developments. Furthermore, participating in democratic
decision-making processes was alien to many villagers due to the previous political context and
structures. ECEAT CZ’s initiative involved a skills development programme which included group
work, training and the publication of the book ‘Jedou k nám hosté’ (‘Guests are coming! or the
guide to becoming a rural tourism entrepreneur’) describing the experiences of entrepreneurs who
had been successful in their sustainable tourism activities. One-day seminars for beginners were
financed by local or district governments.
10
Financed by Prince of Wales Business ForumPPT Working Paper 12 Tourism in Poor Rural Areas
15
Training focused not only on standards for accommodation and service provision but also on the
care for, and the protection of, the village’s natural assets. For many villages in rural areas, the
main, and often only asset, is their relatively unpolluted environment, pristine nature, and the
traditional way of life. Securing local support in maintaining this environment was therefore seen as
critical to the long term sustainability of tourism as a alternative economic livelihood.
The development skills project was initiated as a long-term programme, part of which was to
develop a country-wide network of ECEAT CZ offices, offering advice to local entrepreneurs. One
element of the skills project was concerned with the certification of quality standards.
Product development focused on the production of a guidebook to country holidays (discussed
further below) and other promotional material.
4.3.2 Heritage Trails (HT)
Despite these small, but nevertheless positive beginnings, progress of the programme was
constrained because of inadequate policy and financial support. Problems of establishing a
consistent partnership with government continued in dealings with the Ministry of Regional
Development. Efforts to build an institutional relationship were hampered by frequently changing
political and civil service staff. As a result, in 1998 the ECEAT CZ board decided to extend its
TSRD programme further and develop new activities that would strengthen its position with regard
to the government.
The aim of this extension was not only to create a new tourist product that would build on the
existing skills and products programme but also to:
• Capitalize on the global trend towards ‘alternative’ holidays;
• Realize the full potential of the country’s natural and cultural assets –(the Czech Republic has
11 UNESCO World Heritage Sites, 6 UNESCO Biosphere Reserves, several national parks and
protected areas, and many smaller but unique sights of natural, cultural and technical heritage);
• Motivate those rural areas that had not yet developed their own tourism brand;
• Move beyond accommodation provisions to include additional products that would involve the
wider community;
• Expand co-operation to a wider range of accommodation providers;
• Attract higher income tourists to generate more income for rural communities;
• Strengthen ECEAT CZ‘s position as a partner for central government institutions.
By coincidence, a product that would meet these objectives was developed independently: the
ambitious, 18 month EU PHARE
11
project managed by the English not-for-profit company
Ecotourism Ltd. The project was implemented in three countries –(the Czech Republic, the
Republic of Slovakia and the Former Yugoslav Republic of Macedonia) and aimed to implement an
innovative product, the Heritage Trails.
The core principle of the PHARE project was that new Heritage Trails should be developed on the
basis of a cross-sector partnership. Thus ECEAT CZ again began to build high level relationships
with the Ministry of Regional Development and the Czech Tourist Authority (CTA) for project
implementation. Concurrently, the Ministry started to prepare the ‘National Development Plan’ as a
11
The EU PHARE programme was dedicated to Eastern, Central and South-Eastern European countries previously under
Communist regimes and in transition to market economies. Support for sustainable tourism development has been one of its tools for
regeneration of rural economies across these countries.PPT Working Paper 12 Tourism in Poor Rural Areas
16
key tool for the EU accession process. The Ministry’s willingness to listen and to understand the
needs of rural areas was visibly higher than a year before. However, no financial support was
received although institutional support slowly appeared. A Manual for Operators was produced as
part of the PHARE project and this was promoted as a CTA product in return for CTA's support for
the production of maps for the Heritage Trails, a website and electronic magazine (www.heritagetrails.cz). Thus ECEAT CZ gained the right to use the official CTA logo, and the Heritage Trails
became a part of the official Czech tourist offer.
Box 2: Heritage Trails
Linking several tourism facilities and products located within a geographic area and marketing them in unity
has been the essence of the 'heritage trails'. The aims are to design a marketable product; to increase the
number of visitors and revenue; to increase synergy effects between the variety of producers; to cut
marketing and administrative expenditure; and to ease access to the product. The individual enterprises
within the trail remain separately owned but co-ordinated action is required in terms of developing
infrastructure, signage, liasing with in-bound agents, pricing and marketing. The trail is not a fixed product in
terms of opportunities to visit it. It can be visited in part or as a whole, guided or self-guided, and by various
means of transport. However, it is also sold as a package to tourist via a tour operator.
Differing objectives of partners and participants emerged. For example:
• ECEAT wanted successful HTs in North and South Moravia that would provide a pilot scheme,
which could be ‘rolled out’ in other regions within the Czech Republic and internationally
through ECEAT's international network.
• During early implementation, environmental activists tried to 'highjack' the project for their
fight against a planned road and tunnel connection under the Jeseniky mountains to Poland.
• Entrepreneurs in both Moravian regions expected immediate results in the form of increased
visitor arrivals.
• Local and District Governments expected the establishment of an association that would be able
to solve the bottlenecks related to tourism development within their own districts.
Within the time-frame of the project two Heritage Trails were developed, one in Northern Moravia
and one in Southern Moravia. The process involved four key steps(described further in Box 3):
1. building partnerships;
2. identifying tourism products of the trail;
3. training stakeholders and developing strategies; and
4. marketing the trail.
Although the PHARE project ended in 2000, ECEAT has continued to roll out the concept and
share the training materials and approach. Thus there are now five HTs:
1. The Pradede HT in Northern Moravia: Sumperk, Bruntal, and Jesenik Districts
2. The Winelands HT in Southern Moravia: Znojmo, Uherske Hradiste, Brno Districts
And three new HTs based on replication and transfer of skills:
3. Trebic, Jihlava, Jindrichuv Hradec Districts
4. Decin, Litomerice, Usti, Ceska Lipa Districts
5. Sumava PPT Working Paper 12 Tourism in Poor Rural Areas
17
Box 3: Making a Heritage Trail
Step 1: Establish partnerships to create the Heritage Trail
• Core partners needed to be identified before funds could be received for enterprise development: e.g. a
UK based organisation, and one or two destination organisations as lead partners.
• Post receipt of funding, priority work in destination is to build on these partnerships and create further
partnerships through a stakeholder process that evolves from the activities outlined in the steps below.
Step 2: Identify the area and tourism products of the ‘trail’ with partner organisation(s)
• Clarify geographic area of the trail. This can include, rural, urban, or a mix of these environments,
usually dependent on the objectives of the enterprise development intervention.
• Clarify the products to be included, such as:
I. Heritage sites – natural and cultural (tombs, museums, castles, national parks, rivers, lakes)
II. Cultural interest – traditional and modern arts, crafts, music, dance, wine & beer making.
III. Accommodation, food and drink providers (hotels, guest-houses, B & B, self-catering, campsites,
restaurants, inns)
• Decide on how these products will be accessed and how they will be linked to create the trail – i.e. what
forms of transport can be used, but also what is ‘unique’ about the trail and what is has to offer.
Step 3: Train ‘trail’ stakeholders with partner organisation(s)
• Market analysis of tourism markets to identify which tourists to target
• Develop a marketing strategy that meets identified demand with tourism producer capacity.
• Train an in-bound tour operator and/or partner organisation(s) to manage arrivals, transfers, departures,
and travelling between each location on the trail – walking paths, cycle routes, car hire, public transport.
This includes ensuring HT sign-posts are in place on the trail and existing maps, and specially created
HT maps, are available for tourist information packages.
• Decide on price that tour operators should charge for the HT package including transport to destination.
Step 4: Market the Heritage Trail
• Prepare marketing materials – brochures, maps for self-guided tourists, web site, video, CD ROM, ezine.
• Distribute materials to identified markets – national tourist board offices, tour operators.
• Direct marketing through domestic and overseas tour operators contacted by HT management, either by
visits (Travel Fairs, arranged appointments), or by email and telephone.
4.3.3 Materials and standards for rural tourism products
As part of the initial project, ECEAT CZ produced a guidebook (‘A Countryside Holiday
Guidebook’) featuring all types of accommodation, including farms, campsites, self-catering, B&B
and small hotels. Table 3 below illustrates the widespread use of the book and the increase in visitor
numbers since 1993. To date, the majority of visitors have been Dutch, preferring simple campsites
and attracted by landscape characteristics, affordability, and the absence of mass-tourism. Although
these types of tourists generally spend limited amounts of money, the low investment required to
establish simple campsites is seen as a cost effective way to develop tourism experience. Other
tourists, such as the domestic, German and Belgian markets, seem to prefer self-catering
accommodation, B&Bs and small village hotels. These types of accommodation have increased in
number since 1999 in response to increased promotion in the tourist originating countries. PPT Working Paper 12 Tourism in Poor Rural Areas
18
Table 3: Number of guests identifying accommodation through ‘A Countryside Holiday
Guidebook’
1993 1994 1995 1996 1997 1998 1999 2000 2001
300 710 667 1903 1547 2355 2813 3487 3995
Source: ECEAT CZ
Marketing material specific to the Heritage Trails was produced, both in printed and electronic
form, including maps, an e-zine, and a website. In addition, the HT project built relationships with
tour operators in originating countries such as The Netherlands, Germany, UK, France and Belgium
and CTA marketed the product through their offices abroad.
Efforts to develop a certification scheme made considerable progress and two different schemes are
presently in operation in the Czech Republic. The first scheme relates to accommodation quality
standards and includes several different rating schemes depending on the different types of
accommodation provider. Most of these accomdation quality schemes are either run by tourism
trade bodies or governmental agencies. The second certification scheme refers to contributions to
ecological and heritage protection, and is run by ECEAT but implemented under bilateral contracts
by the Union of the Czech Rural Entrepreneurs, a sub-organisation of the Ministry for Regional
Development. The provider receives a certificate and right to show the logo which indicates their
contribution to the protection of the environment and/or heritage of the area.
ECEAT CZ is now working with several ‘kraj’ (counties) to develop an integrated set of tools for
sustainable tourism development replicating the methodologies used for partnership building, and
producing a ‘Countryside Holiday Guidebook’ for each county. Additional HTs have also been
created in Bohemia
4.4 Progress, challenges, impacts, and critical factors
The following section looks at the main areas in which progress has been made by the initiatives,
and any indicators of impact. It particularly considers progress in dealing with the key issues
(Section 2) for rural tourism product development:
• building capacity and quality
• marketing
• addressing practical constraints
• institutional support
While impacts on livelihoods of poor people need to be assessed, there is at this stage insufficient
data available. Key elements of the approach that have emerged as useful are identified, along with
the main challenges.
4.4.1 Progress and challenges
Product development
As indicated above, five HTs were created. Of the first two, the Northern Moravian HT has
flourished. Despite the difficulties, at the outset of creating the HT, and of finding a common PPT Working Paper 12 Tourism in Poor Rural Areas
19
denominator to unify local people’s efforts to build a cultural identity
12
, a follow on EU project
13
,
‘Pradede’ (Forefather’s Land), did achieve this unity of purpose. In addition the HT team had a
strong local project manager who was able to drive the project. This and the fact that a local
association had already been developed for the HT, helped to ensure local ownership of the new
product and to embed the process of collective decision-making, usually such an anathema in postcommunist countries.
The Southern Moravia HT was based on viticulture, and the trail was marketed as the ‘Moravian
Winelands Heritage Trails’. This trail has stagnated due to the absence of a core team to build
cohesion and purpose, but also because it did not have an additionall follow-up project.
Attracting tourists
As indicated in Table 3, the Guidebook is used by approximately 4,000 tourists per year who book
via ECEAT. In addition, it is estimated that two to three times as many book accommodation
directly with the farms. The Heritage Trails project itself attracted a total of 500 tourists in both
North and South Moravia between 2000 and 2002 (according to tour operator sales) of which by far
the largest number visit the Northern Moravian Trail (between 110 and 170 visitors per year). As
with the farms, it is difficult to estimate how many tourists visit the trails independently.
Building tourism capacity and skills
Approximately 15 one-day training sessions were held with about 225 potential, small-scale
entrepreneurs in seven districts. The goal was to encourage entrepreneurial newcomers to start-up
by sharing information with others hat have just done so. It is difficult to measure the direct impacts
of these training sessions since other factors may be involved in decisions to set up a new
enterprise. However, the activities led to the setting up of the Jeseniky independent HT Association
‘Pradedova rise’ (Praded´s land) which has been instrumental in the survival of the Northern
Moravia (Pradede) trail. The training also helped to create a network of new tourism entrepreneurs
which it is hoped will lead to longer-term capacity development through the sharing of experience.
Building institutional collaboration
Four one-day training sessions were held in order to bring together three stakeholders:
governmental and public bodies, entrepreneurs and NGOs. –These training sessions were used for
discussing tourist marketing, communication and co-operation. The results have been mixed.
Although establishing partnerships was one of the first steps in the HT implementation process, in
Southern Moravia this did not translate into setting-up a HT producers association as has happened
in Northern Moravia. Initial participation demonstrated a willingness to develop and exchange ideas
among the trail providers, and to implement those ideas (the Wine Trail), but joint action could not
be maintained. The HT project did however consolidate an effective partnership between ECEAT
CZ, the government (Czech Tourist Authority, and regional governments – ‘kraj’) and private
sector companies (inbound tour operators, foreign tour operators).
Generating local income
Revenue to local households that is directly attributable to these initiatives and easily measurable is
quite small so far. Holiday packages for the Heritage Trails are priced at around €300 per person
and this has generated a total of €150,000 to date. Of this, the local operator’s received around 30
12
This area had been resettled after World War 2, and there was no common cultural heritage.
13
Under Phare Credo, a cross-border programme that in this case is with Poland just north of the Praded mountain area. PPT Working Paper 12 Tourism in Poor Rural Areas
20
per cent, (around €45,000), €90,000 remained with local entrepreneurs, while 10 per cent (€15,000)
went to ECEAT CZ, for financing further development, funding and policy work.
Around 16 accommodation providers participate in the project resulting in an average income of
€5,625 over the two years between 2000-02. This is about the same as an individual could earn in a
year in the Czech Republic based on the average annual salary of CZK 13,000 (€433 per month, or
€5,196 annually).
However, this does not include earnings from other tourists who do not pass through ECEAT
bookings, and earnings from spin-off enterprise. Earnings to date are clearly just a start in what
promises to be an expanding product.
For tourists booking farm accommodation via the Country Holidays guide (i.e not on the Heritage
Trail package), the average length of stay is nine days. With an average expenditure per family of
three people of around CZK 500 (€16.7) per night this amounts to a total income of over €200,000
per year, much of which would ideally benefit the local communities.
Estimating ‘leakages’ is difficult, but they do occur largely because providing food and drink for
tourists in all types of accommodation is cheaper when bought from supermarkets, some of which
are now owned or licensed by foreign retail companies. Small independent and organic producers of
farm produce cannot compete against the low prices from large private sector farms. Besides,
certain food, drink and other supplies needed to accommodate tourists are often not available
locally.
Changing local attitudes towards tourism
A less obvious impact, but important over the long-term, is a change in attitudes towards
sustainable tourism and its delivery by a large number of those stakeholders who participated in
partnership workshops and marketing training. From limited understanding and a distrust of change,
participants in the ECEAT CZ training programmes achieved a substantive shift in their attitudes to
rural tourism development.
Both trail experiences to date suggest that positive social impacts occur only when strong
leadership, and repeated and new training opportunities are offered. These enable collective action
among trail providers to deliver consistently good standard products. When this happens, and
tourists do return on repeat visits as in the case of Jeseniky, the community is likely to support rural
tourism development, and new partnerships can be built, such as with Polish communities across
the border.
Enhancing environmental sustainability of tourism
At the local level, the understanding of the relationship between commercial sustainability,
protection and conservation of natural and cultural assets is taking time to develop. Evaluation
suggests five rather than two years of intensive investment in education and support are needed to
properly embed understanding of the importance of maintaining this balance. However, the ECEAT
CZ environmental certification scheme has been accepted at national level, and tour operators who
wish to use the HT name and logo have to pay 10 per cent of their HT revenue to ECEAT CZ.
Recently, agreement has been reached with the Ministry of Environment for ECEAT CZ to start a
programme for an eco-certification system throughout the Czech Republic to include urban areas
and go beyond the rural areas in which it works at present. PPT Working Paper 12 Tourism in Poor Rural Areas
21
Building policy support for rural tourism
Government support for tourism dispersion and diversification into the rural economy has partially
come as a result of ECEAT CZ’s persistence in presenting and demonstrating alternative forms of
tourism development over the past eight years. Final adoption of the HTs as a CTA marketed
product in 2000 was a substantial victory. Government policy towards dispersion is now more
proactive. In early October 2002, a high profile, national seminar on the countryside was opened by
President Havel and attended by government ministers (agriculture, economy, environment and
culture). Here, proposals were put forward for joint action on sustainable rural tourism, calling for a
joint forum of Ministries, the Tourist Board, ‘Kraj’ (county governments) to be established. The
objectives are to change restrictive laws and to support the promotion of rural tourism
entrepreneurs. The aim is to create an official country-wide unified tourism product with its own
logo. Following the autumn elections however the new Minister for Regional Development has
appointed a new director of CTA, who now decided to focus on Prague, Castles and Spas.
However at the county level it seems more successful. Some counties have now introduced a new
local subsidy programme for the improvement of rural tourism infrastructure (operational in N.
Moravia, while the Highlands county is planning this for 2003).
Some counties have also started to prepare local Countryside Holiday Guidebooks (for example N.
and S. Moravia, Highlands, S. Bohemia) and it is hoped that eventually all counties will follow suit.
The Heritage Trail concept still requires further promotion at the county level as its objectives and
potential are still not fully understood and supported. It is anticipated that the products will be
marketed by the counties themselves through exhibitions, regional road shows and travel fairs. In
this way, the HT and countryside products will become national products supporting a national
tourism strategy that does focus on dispersal and diversification of Czech tourism.
4.4.2 Key obstacles and ingredients of success
Key challenges to rural tourism development in the Czech Republic include:
• Lack of government support;
• Need for co-ordination and local leadership to make the concept of Heritage Trails work.
Because they involve a range of small-scale tourism products and providers, and the very
concept rests on linking these conceptually and logistically for the tourist, co-ordination is
essential. But where the local leadership to achieve this has been lacking, the HT concept has
not flourished;
• Lack of statistics and feedback (via government) for adaptive management and marketing.
• Lack of resources for updating marketing material;
• Slow pace, small scale of economic impacts to date;
• Uptake of the new product. HT is constrained by strong competition from other tourism
destinations in the Czech Republic (in particular Prague), and from other packages also sold by
tour operators. While commercial competitiveness is sufficient for some gradual success in at
least some of the sites and areas, the investment in rural tourism cannot create a sudden boom.
However, some particularly valuable elements of the Heritage Trail strategy emerge:
• On-going and repeated attempts to build institutional collaboration. Although progress has been
slow, institutional collaboration does occur.
• Defining the rural product through the creation of ‘heritage trails’. PPT Working Paper 12 Tourism in Poor Rural Areas
22
• Providing approach, tools, and marketing material that could easily be replicated and taken up
by others (particularly at kraj level). Thus the initial project work could serve effectively as a
demonstration for catalysing wider change. This is important to note given the donor shift away
from projects.
• Addressing marketing and customer information at the same time as developing the product and
resource.
• Working with counties (kraj) as they have gained an administrative role, and helping them
develop their interest in rural tourism promotion in very practical ways. PPT Working Paper 12 Tourism in Poor Rural Areas
23
5 Development of Rural Tourism through Heritage Trails in Uganda
5.1 Background: tourism trends, policy and rural tourism objectives
Historically, tourism was Uganda’s second most important export after coffee. In 1970, 102,000
foreign visitors were recorded for Murchison Falls National Park. This contrasts with 5,800
recorded in 1996 for the same Park (Mann 1998). The collapse in tourism volumes has been
mirrored by a collapse in the large mammal populations in protected areas, which were a key
tourism asset.
Since the restoration of political stability in 1986, tourism has re-emerged on the policy agenda, but
tourism development still faces many obstacles. An ambitious Tourism Master Plan drawn up a
decade ago (UNDP/WTO 1993) set targets for development and arrivals that have so far not
transpired. Inadequate government resources have been unable to provide the necessary framework
for tourism development and the protection of its valuable natural and cultural resource base. The
tourism sector has not been recognised as a priority development sector in wider government
circles. In 1996, tourism moved from having its own Ministry, the Ministry of Tourism, Wildlife
and Antiquities, to being part of the larger Ministry of Tourism, Trade and Industry (MTTI), and its
financial and human resource capacity was heavily reduced. Tourism has lacked political support in
the Ministry of Finance, Planning and Economic Development (MFPED) and therefore is not
eligible for central Poverty Action Funds (PAF) and not given priority in the Medium Term
Expenditure Framework. Despite the formulation of the new tourism policy, this situation is not
expected to change in the near future. Hence donor resources will be highly significant in the
implementation of the new tourism policy framework, but donor support to date has been
fragmented. The capacity of the sector is likely to be further weakened by an impending merger of
the Uganda Tourism Board (UTB), the Uganda Investment Authority (UIA) and the Uganda Export
Promotions Board (UEPB) that has been highly contested by the private sector and UTB. The
private sector has also been weak and fragmented.
Uganda’s tourism product is also problematic. The legacy of Idi Amin and more recent insecurity
on its borders has created an image problem (Holm-Petersen 2002). Uganda has to compete with
other African destinations (eg. Kenya, Tanzania, Zimbabwe, Botswana, Namibia and more recently
South Africa). Gorilla tourism has been the only niche where it had a competitive edge but this led
to a monoculture approach to tourism development and effectively put a ceiling on the industry as
only about 4,000 gorilla tracking permits are available annually. It is estimated that currently only
5,000 tourists visit Uganda each year and 10,000 expatriate residents participate in tourist activities
(Mann 1998).
On the positive side, Uganda has by-passed mass tourism, albeit unintentionally, because of its past
troubles, and is well positioned to take advantage of newer trends, and alternative forms of tourism
that can protect natural resources and stimulate cultural diversity while generating economic
growth. A new strategic plan and a tourism development policy have been developed to provide a
framework to transform tourism into a major economic sector and a vehicle for poverty alleviation
(MTTI 2002). The new tourism policy has been presented to Cabinet for approval, before being put
into legislation. The overall policy objective is for tourist arrivals to reach a ‘critical mass’, for the
sector to become a vehicle for development and to sustain Protected Areas (PAs). The policy
emphasises ‘large-scale participation of communities’ and cultural tourism, including handicraft
development, as a rural income generating activity. It also embraces a bottom-up principle of
supporting developments at district level, again with a focus on community-based tourism
development. Various donor programmes are supporting product and infrastructure development PPT Working Paper 12 Tourism in Poor Rural Areas
24
that will encourage niche product diversification and promotion of avi-tourism (bird watching),
mountaineering, sport fishing, white water rafting, primate viewing, eco-tourism, cultural and
community-based tourism (Mann 2001).
Diversification and dispersal of tourism into rural areas have been strongly supported by the
Government, particularly the UTB, for two main reasons. Firstly, UTB launched a diversification
programme in the mid-1990s and community and cultural tourism were identified as important
niche products to redevelop international tourism. Thus rural tourism is seen as a means to improve
and expand the product. Secondly, it was recognised that community tourism could contribute to
wider national development objectives enshrined in Uganda’s Comprehensive Development
Framework (CDF) and the Poverty Eradication Action Plan (PEAP) (which has guided government
policy formulation since 1997).
In marketing Uganda, UTB emphasises a circuit of nature-based attractions predominantly in the
west and south-west: Murchison Falls National Park, Kibale Forest National Park, Queen Elizabeth
National Park, Bwindi Impenetrable Forest National Park and Lake Mburo National Park. Other
important tourist sites outside this circuit include white water rafting,the Source of the Nile and the
Ssese Islands in Lake Victoria. Tourism development in the North has been constrained by
insecurity. This approach is the antithesis of the traditional approach to tourism in developing
countries, where ‘honey pot’ development entails the building of large and exclusive resort hotels
by foreign investors, ring-fenced to keep the surrounding poverty at bay.
5.2 The Heritage Trails Initiative
The concept
Building on the marketing efforts of UTB, an initiative to develop and market a new rural tourism
product, a Heritage Trail (HT), was conceived in the late nineties. A Heritage Trails Project 1999-
2002 was established as a partnership between three organisations: the Kabaka Foundation, Action
for Conservation through Tourism (ACT), and the Uganda Community Tourism Association
(UCOTA). The Kabaka Foundation is an indigenous Ugandan NGO, established by the King
(Kabaka) of Buganda – a traditional kingdom within Uganda restored by the current President
Yoweri Museveni. ACT is a British charity and UCOTA is a tourism producers’ association,
formed in the mid-1990s ‘to encourage quality community-based tourism with the aim of benefiting
communities through sustainable development’ (Williams, White and Spenceley 2001).
As in the Czech case, a Heritage Trail was seen as a way of defining and creating a rural tourism
product. The project’s aim was to establish a pilot heritage trail linking a number of cultural sites in
the Buganda Kingdom to be marketed as one product. The link between the sites was the common
promotional theme, the ‘Kabaka’s (King’s) Trail’, rather than a physical route. The project aimed to
facilitate the creation of local community tourism associations at each site, which would develop
and manage tourism services and facilities.
The design of the project rested on some core considerations and principles:
1. It explicitly evolved from community-based tourism, with a focus on the social and
economic benefits of a trail-based tourism product for local communities.
2. It focused on the importance and potential of cultural revitalisation. In the Kingdom of
Buganda, as elsewhere in Uganda, much of Uganda’s rich cultural heritage fell into disrepair
during the civil strife under Presidents Amin and Obote. The Kabaka Foundation and ACT PPT Working Paper 12 Tourism in Poor Rural Areas
25
identified tourism as a tool to revitalise cultural sites and to reduce poverty amongst
marginalised communities who are the traditional custodians of the heritage.
3. In connection with the first two points, the project focused on creating community
institutions, not just supporting individual entrepreneurs. Community associations were seen
as the guardians of culture, the developers of the tourism resource, and the agents for
community benefit. This is more in line with a development approach in rural areas than a
typical small business approach.
The design of the project was also influenced by security considerations. In 1999, a group of
tourists on a gorilla-watching holiday in the Bwindi Impenetrable Forest National Park in the far
south west of the country were killed by rebels from Rwanda. As a result it was decided to locate
the development of a pilot heritage trail near to Kampala, and also to focus initially on the domestic
tourist market (ex-pat residents, Ugandans and school children), since international arrivals had
fallen sharply following the incident. Other strong reasons to develop the trail in this central area
were that it fell within the traditional kingdom of Buganda and the project had the strong support of
the Kabaka (King). Although these sites are within 45 minutes of the capital city, a baseline study,
conducted for the project in 2000, showed that they remain on the periphery of mainstream
economic activity, lack access to essential services and infrastructure and exhibit high levels of
poverty.
The objectives of the heritage trail project were therefore defined as follows (HTU 2002):
• to demonstrate how tourism can be harnessed for poverty alleviation;
• to conserve natural and cultural assets through education and understanding of sustainable
tourism development;
• to assist communities to participate in the tourism opportunity and to influence policy making in
this area; and
• to strengthen local institutions, particularly UCOTA.
Approach and strategies
The sites to be included in the Buganda Heritage Trail were identified by stakeholders such as
Kingdom officials and the Commissioner of Antiquities. Extensive field visits were undertaken and
in November 1999 nine sites with the highest tourism potential were selected on the basis of:
• proximity to the capital
• accessibility
• attraction
• type of site
• historical significance
• marketable product theme
• community compatibility
However, project implementation only proceeded with six of the nine sites. The reasons why
implementation couldn’t proceed at three sites were varied. They included a lack of community
cohesion and/or motivation, the community was difficult to define, insurmountable political
sensitivities, other agencies were providing assistance and/or it was questionable whether incomes
generated would benefit the intended beneficiaries. Details of the six remaining sites are included in
Table 4. PPT Working Paper 12 Tourism in Poor Rural Areas
26
Table 4: Community associations and attractions on the Kabaka‘s Trail
Community Association / Site Attraction No. of
members
Baagalayaze Heritage Site Burial tombs of a mother of a king 35
Kanyange Cultural Centre Burial tombs of a mother of a king 22
Naggalabi Cultural Tourism Association
(NACUTA)
Coronation site 25
Ssezibwa Falls Tourism Project (SFTP) Traditional spiritual site for healing
and area of natural beauty
29
Suuna II Wamala Tombs Tourism
Association (SWATTA)
Burial tombs for a king 60
Tourism and Handicraft Association of
Kalema (THAKA)
Prison ditch 40
Source: HTU, 2002
The main activities of the project have involved:
• On-site work with communities
• Community training programme
• Building institutional collaboration and strengthening
• Marketing
Table 5 shows the chronology of activities for developing the trail sites.
Table 5: Heritage Trails Uganda Project Activities
Year Main Activities
1 • Trail site identification, market research and site selection;
• Dialogue with local site stakeholders to confirm interest in participation and exploration of
land user rights and/or revenue sharing agreements;
• Creation of site community tourism associations where appropriate;
• On-site handicraft workshops to facilitate income-generation in the short-term and mobilise
community members;
• Baseline socio-economic survey of communities and historical site research;
• Tourism and conservation awareness building.
2 • Participatory business development planning;
• Implementation of the community training programme;
• Implementation of site plans.
3 • Production of promotional and educational materials;
• Further community training;
• Further site development;
• Launch of the pilot trail and implementation of the marketing strategy;
• Review and forward planning;
• Development of other trails country-wide.
On-site community work
This initially focused on building the capacity of new legally-registered community-based tourism
institutions. Community members were mobilised through local leaders such as elected councillors
and cultural guardians and attended participatory seminars to develop a constitution and elect an
Executive. To participate in the activities of the association, community members pay a
membership fee. Of the 215 total members, 135 or 63 per cent are women. PPT Working Paper 12 Tourism in Poor Rural Areas
27
Other on-site activities included a training programme, restoration of cultural assets (involving
training in traditional building skills), exchange visits within Uganda and to Tanzania, and business
planning. A number of potential income-generating activities were identified through a participatory
planning process and assessed through business planning training. However, assessing the
commercial sustainability of these micro-enterprises proved a particularly challenging part of the
project due to low levels of education. Despite follow-up training, some of the community
associations find the business plans difficult to use effectively.
Clarifying the land rights of the new associations was a critical factor in the project. The Kabaka
Foundation acted as a facilitator in negotiations with the Kingdom of Buganda. The three tourism
associations operating on King’s land
14
were given guaranteed use rights. A legal agreement was
made stipulating that the three associations were required to give 30 per cent of the net entrance fee
collected at each site to the Buganda Kingdom administration for maintenance of other sites. The
remaining 70 per cent and all other income from their activities (e.g. guiding, handicraft sales,
cultural entertainment) accrues to the association and its members. This agreement provided new
incentives for the local community to work together with each other and the traditional cultural
institution.
Institutional collaboration
In addition to institutional capacity building for each community tourism association, the project
developed links with other institutions nationally, and an institutional strengthening programme for
project partners and staff was undertaken. Two project advisory groups were established. A tenmember steering committee included representatives from private, public and voluntary sectors
including the UTB, Uganda Tourism Association (UTA), Association of Ugandan Tour Operators
(AUTO), Voluntary Service Overseas (VSO), the Department of Antiquities and Museums
(DAMS), the Ministry of Gender, Labour and Social Development (MGLSD) and the Ministry of
Tourism, Trade and Industries (MTTI). It increased the policy influence of the project and also
played critical role in mediating political sensitivities between stakeholders and mobilising
resources (Opio 2002). A larger stakeholder group (approximately 40 members) was established to
guide site selection country-wide for future trails in the extension phase of the project. This group
included a wider range of stakeholders, such as cultural institutions, UNESCO, the Uganda Wildlife
Authority (UWA), and the National Curriculum Development Centre (NCDC). Institutional links
were also established with a number of training and research organisations. Figure 1 illustrates the
relationships between the different groups and organisations in the pilot trail project. The larger
stakeholder group reached a consensus that the project initially run by the three NGOs should be
transformed into an independent NGO, ‘Heritage Trails Uganda’ (HTU), to reflect its national
remit. HTU was registered in December 2002.
Beyond these formal links, project staff participated in policy discussions on tourism and culture,
and advocated more cultural education on the national curricula. The focus of engagement has been
to encourage the recognition of cultural tourism as a tool for poverty reduction and heritage
conservation. Such ideas have also been disseminatined internationally, through media coverage,
distribution of a video, and presentations at several international conferences.
14
Of the three other sites, two are tombs of queen mothers. These are owned by the traditional cultural guardian of the tomb, the
Nnamasoles, who are the patrons of the respective community associations and encourage community participation in tourism and
conservation activities. The third site, Ssezibwa Falls, is on land owned by the Church and by a tea company. The association secured
a lease from the church and the tea company donated its land. PPT Working Paper 12 Tourism in Poor Rural Areas
28
Figure 1 Institutional Relationships in Uganda’s Heritage Trail Project
Marketing
At the start of the project as part of the baseline study, a tourism survey was conducted at each site
to compile information on visitor numbers, types and needs. It showed that most sites received few
visitors and that these were mainly Ugandans with spiritual offerings and schoolchildren (ACT
2000). In early 2001, qualitative market research was carried out with the help of focus groups
including tour operators, Kampala based ex-pats and Ugandans, and school children. The groups
first concentrated on the HT concept, and then undertook an analysis of each site within the
Kabaka’s Trail, and included both domestic and international potential markets for the trail. In
November 2001, ‘Kabaka’s Trail’ was launched with promotional material and high profile
marketing. Current marketing initiatives include linking up with private sector operators who have
expressed support for the trail through UTA and AUTO. For example, the Sheraton Hotel sponsored
a marketing briefing on the trail for tour operators in March 2002.
The project recently (August 2002) entered an extension phase which is intended to expand the
heritage trail concept country-wide through the new NGO, Heritage Trails Uganda. The national
stakeholder group developed a more detailed set of criteria for site selection based on lessons learnt
in the pilot phase. There are currently insufficient funds to undertake professional market research
to guide new site selection in the extension phase, hence site selection is likely to be oriented on a
survey of AUTO members, and consultation with the NCDC for cultural education potential.
5.3 Progress, challenges, impacts and key factors
5.3.1 Progress and challenges
Assessing impacts
Methodologies for assessing the positive and negative impacts of tourism enterprise intervention on
communities in developing countries in terms of poverty reduction are a recent development, and
Partner:
Kabaka
Foundation
Partner:
ACT (Project
Management)
Partner:
UCOTA
Advisory Groups: public,
private and voluntary
sectors
1. Steering Committee
2. Stakeholder Group
Other
organisational
linkages
Heritage
Trails Project
Team
Project Beneficiaries:
6 Community Tourism Action Groups on the Kabaka’s TrailPPT Working Paper 12 Tourism in Poor Rural Areas
29
still in the process of being tested (Ashley 1999, Holland 2002). Due to a lack of documented case
studies, the Heritage Trails Project in Uganda has developed its own set of indicators for monitoring
project progress. These cover both positive and negative impacts, with a focus on the impacts on
livelihoods at local level. They cover the following impact areas:
• Empowerment, networking and dissemination (e.g. number of community association members,
number of members elected to the UCOTA Executive, number of new partnerships formed,
number of media exposures);
• Skills training (e.g. number of community association members trained in business
development, guiding etc);
• Enterprise development (e.g. number of tourism services provided, number employed, number
of visitors);
• Access to essential resources (e.g. number of community development projects benefiting from
tourism enterprise development);
• Conservation of natural and cultural assets and values (e.g. number of renovated cultural
structures, number of cultural guardians resuming and/or withdrawing from traditional roles).
Data collected on these to date is used below to consider progress against the key issues for rural
tourism identified above, and also considered in the Czech case study. At the time of writing the
community tourism associations have only been operational for one year and the marketing strategy
has not been fully implemented, thus it is again early to assess impacts, particularly on livelihoods.
Product development
The foundations for a new tourism product in Uganda have been developed. The project has
focused on creating associations, restoring sites as products, and developing skills. While the
tourism products now exist they are not yet thriving. However, each association has developed at
least three micro-enterprises including guiding around the cultural site, handicrafts and cultural
entertainment.
Sourcing of raw materials such as spear grass and reeds for the traditional cultural structures pose a
challenge. A recent needs assessment
15
carried out in June 2002 highlighted that a main operational
difficulty for most of the trail groups was a lack of raw materials. These raw materials used to be
freely available locally or donated by loyal subjects, but due to agriculture practices (particularly
livestock grazing) and increased settlement, the materials have to be transported, incurring transport
costs.
Local capacity and product quality
The project has focused on institution building of associations as much as developing
entrepreneurship, and it is still very early to make judgments with regard to acquisition of business
skills. The quality of micro-enterprises inevitably varies across the associations depending on their
capacity, as does their potential to diversify service provision. For example, the traditional
performance group of Baagalayaze Heritage Site is of a very high standard and perform at local
functions as well as on-site.
Maintaining service quality can be especially challenging as several sites lack reliable telephone
communications for advance notice of bookings. In the basic needs assessment, five out of six trail
groups identified the lack of telephones as a main operational challenge. Though UCOTA plays a
15
UCOTA Membership Information questionnaire survey, June 2002 PPT Working Paper 12 Tourism in Poor Rural Areas
30
role in facilitating bookings and providing other support to community associations, it is still also in
need of external technical support.
A key challenge identified by the community tourism associations is a lack of financial resources to
develop and maintain product quality and reliability. An initial low level of visitors is a barrier to
gaining such finance. Marketing remains a challenge to the community associations, in particular
the marketing of handicrafts from which they can generate income even when visitor numbers are
low.
Local benefits: financial and other
The community tourism associations have earned some money from paying visitors to the sites,
although visitor numbers are still too low to make a significant impact. However, visitor numbers to
one of the better known sites, Ssezibwa Falls, have doubled and the association employs two paid
guides (the other sites have volunteer guides). The site earned 875,300/= Uganda Shillings,
(approximately GBP £340) between January and November 2002 from entrance fees.
In addition to visitor fees, sales of handicrafts to the UCOTA shop generated 425,000 Uganda
Shillings (GBP £170) worth of business for five of the associations between January and August
2001 (the shop was temporarily closed after August 2001). Total income is thought to exceed this as
crafts have also been sold on-site, for example, book keeping records at Baagalayaze show that 90
per cent of craft sales were made on-site in 2001. It is anticipated that craft sales through UCOTA
will also increase through technical assistance from Traidcraft and the McKnight Foundation.
In addition to income, two forms of non-financial benefits are considered particularly important
impacts of the projects. The first is the revival of cultural values and associated social networks and
activities
16
Before the project commenced, most of the trail sites were in a serious state of disrepair .
and in some cases were overseen by elderly cultural guardians with scarce resources. The wider
community, especially the younger generation, had no attachment to the sites because of the
abolition of the Kingdom during the political unrest. The project has initiated the regeneration of
both physical structures (such as traditional receptions, ceremonial houses and tombs) and
traditional, culturally specific, skills such as building, bark cloth making, music and dance. This has
encouraged several cultural guardians to resume their traditional roles and for cultural functions at
the sites to recommence.
Secondly, the involvement of community members in participatory and business planning is
important for developing local capacity, even if this is not immediately reflected in enterprise
development and revenue.
Marketing
To date visitor numbers have been low, partly because the marketing strategy has not yet been fully
implemented (especially for the domestic market). It is anticipated that visitor numbers will grow,
however, as several international schools in Kampala have expressed interest and local ground
handlers are currently incorporating trail sites into their itineraries.
The proximity of the trail sites to Kampala should facilitate uptake by the domestic market, while
the fact that three of the sites are also located on the main tourist routes increases their accessibility
for international visitors. However, a constraint for two sites (Katereke and Wamala Tombs) is the
poor state of the access dirt road, particularly in the rainy season.
16
See ‘Key non-financial livelihood impacts by case study’ in Ashley, Roe and Goodwin, 2001, Table 7, p.24 PPT Working Paper 12 Tourism in Poor Rural Areas
31
Perceptions of insecurity have also constrained growth of the international tourism sector. Security
in protected areas in the west and south-west has improved but the situation has deteriorated further
north due to a rebel insurgency.
Marketing material for the pilot trail in Uganda to date consists of brochures, flyers for international
trade fairs, mini ‘infopoint’ cards, a web site (www.culturalheritagetrails.com). Familiarisation trips
for local ground handlers and schools have been particularly successful. The project is currently
reviewing its marketing strategy with more emphasis on cost-effective methods to attract the
domestic market (e.g. radio and TV adverts, distribution of marketing materials through ex-pat
networks). In the longer term UCOTA will be responsible for marketing the trail sites as part of its
cultural product line. The pilot trail has the support of the Uganda Tourist Board and is featured on
its web-site (www.visituganda.com).
Creating institutional capacity and supportive policy
The project focused on institutional strengthening of UCOTA, in terms of capacity building for
organisational management, marketing, fund-raising and practical skills such as in computing and
driving. An internal evaluation report concluded that overall the capacity building programme was a
success (Dixey 2002). In particular, residential courses enabled the newly elected UCOTA
Executive who reside in different parts of Uganda to constructively address a management
transition. This capacity-building process was, however, just the beginning of a much longer
institutional strengthening programme that is being continued throughout 2002 with additional
resources.
In 1999 there was no Government tourism or culture policy although the wider policy framework
and therefore UTB and MTTI were supportive of poverty alleviation through rural tourism
development. A key achievement of the project was that it was very influential in shaping the new
draft national tourism and culture policies (Opio 2002).
5.3.2 Obstacles and success factors
Among the challenges encountered, the main obstacles in the Ugandan context emerge as:
• Low level of development and lack of skills at community level. The formation of the
community associations, their business planning, product development and marketing
training took much longer than anticipated to reach a reasonable standard for foreign and
domestic tourism markets. The practical concomitants of low development, such as lack of
telephones and access to credit, also pose a challenge for building product quality.
• Limited international tourism in Uganda. While international visitors could provide a strong
and culturally interested niche market, continued insecurity is constraining the growth of
international arrivals. The domestic market for the trails is important but limited. Marketing
to either group is slow and needs greater investment of resources. The knock-on effects on
small-scale producers can be substantial: one year without tourists may mean the collapse of
a small tourism enterprise without an adequate financial safety net to get through the tough
times.
• Implementation obstacles: the initial project time period of two years was too short and the
design over-ambitious. Resources and expertise in some areas have been insufficient, while
funding delays exacerbated problems. The project did achieve most of its objectives over
three years (Opio 2002) although the time period was simply insufficient to fully implement
a bottom-up participatory approach to product identification and marketing and to help the PPT Working Paper 12 Tourism in Poor Rural Areas
32
communities achieve their enterprise and management objectives. However, with this type
of intervention, which is always likely to depend on donor support, short-term funding
cycles are likely to remain a problem unless donors change their way of operating, or
investors are found from elsewhere.
It is clearly early days for the project, particularly as far as delivering flourishing enterprises and
livelihood impacts on the ground are concerned. Nevertheless, some important strategies for laying
the foundations for rural tourism can be identified, including:
• Building community associations, not just entrepreneurs, in order to serve the social
development objectives of the approach;
• Working with women and specifically with craft producers, to get activities going;
• Investing in training at community level, including exchange visits;
• Building on traditional cultural assets and tapping into the cultural niche in the market;
• Developing innovative land user rights agreements;
• Building partnerships with a range of national institutions, and building capacity in UCOTA.
These partnerships become particularly important now that the concept is being extended to
other sites;
• Developing a range of marketing strategies and readiness to focus on the domestic sector and on
schools. Building links with tour operators;
• Focusing the pilot on sites near Kampala to minimise logistical and security problems, and
maximise the benefit of support from the Kabaka (King). PPT Working Paper 12 Tourism in Poor Rural Areas
33
6 Implications for Developing Rural Tourism
The two case studies share some similarities, despite the very different contexts. Both sought to
develop a rural tourism product by marketing a package of attractions as a ‘trail’. Both invested
much of their effort to work at the local level, and sought to build an association to co-ordinate the
diverse community members or service providers. In both cases, there are associations that have
thrived and others that have ground to a halt. Both also focused on building relationships with
policy-makers and a network of other institutions, and have gone on to use this to replicate the trail
concept. In both cases, marketing was undertaken by the project rather than by the local service
providers.
There are also considerable differences. The Ugandan initiative benefited from a high level of
government support from the start compared to relative disinterest in the Czech Republic. However,
it also had to grapple with a much higher degree of underdevelopment, in terms of local skills and
infrastructure.
This section briefly reviews what light can be shed on the key issues for rural tourism, based on the
analysis of the strategies, progress and obstacles of the two case studies. In doing this, it returns to
the themes and key issues outlined in Section 2, and also draws on other rural tourism examples to
amplify points. In order to identify broader lessons, the analysis necessarily moves up from
describing details to a level of generalisations, none of which will be applicable in all rural tourism
situations. Thus this section should be interpreted as highlighting implications of wider relevance
that can be drawn from these case studies, but not providing a blueprint for rural tourism
development.
6.1 Key Issues
Creating a rural product
These Heritage Trails were not created in rural sites of exceptional tourism value but in attractive
rural settings with some undeveloped assets (such as for example culture, horticulture). The heritage
trails demonstrate the value of packaging an array of attractions as a ‘trail’. The trail concept is
fundamentally a marketing tool, providing a brand image in the mind of the consumer. But it can
also be an organising and mobilising tool to bring together producers on the ground. This is likely to
be particularly important in rural areas, where most products and producers are small-scale, and
need to work together to gain economies of scale (e.g. in marketing, accessing training). The value
of promoting a rural product as a trail is also evident in a South African case described by Rogerson
(2002). The implication is that for the more typical rural areas (not the exceptional sites), use of a
trail concept or other means of packaging and branding can be useful ways to strengthen local
tourism product.
Ensuring sufficient quality of the product and services
This has proved to be a big problem in Uganda, given the limited time frame to date, low levels of
education, lack of any previous tourism experience in the rural areas, and lack of local investment
funds. A similar example comes from the Amadiba Horse and Hiking Trail on South Africa’s Wild
Coast, which is a community project based on a strong asset (beautiful undeveloped coastline)
providing horseback trails and hiking. However, the NGO involved has also been struggling to raise PPT Working Paper 12 Tourism in Poor Rural Areas
34
standards of guiding and accommodation to sufficient levels (Ntshona 2002). Quality appears to
have been less of a problem in the Czech Republic where, although the enterprise culture was new,
general skill levels were higher. In particular, the trails in the Czech Republic could make use of the
existing certification programmes, which helped to set, and encourage, quality standards. The
implication is that ensuring sufficient quality of rural tourism services can be a big challenge,
particularly in poor developing countries, and requires substantial investment in training.
Investing in marketing and attracting visitors
It was suggested earlier, drawing on an example from Poland, that one problem in rural tourism is
that a diversity of small producers struggle to invest sufficiently in marketing. This appears to have
been borne out by these two case studies as in neither case are the local service providers
themselves yet doing the marketing. ECEAT CZ and the Ugandan Heritage Trails Project have
produced marketing material and made links with private operators, as well as the National Tourism
Organisation. The same applies to the Amadiba trail in South Africa, where marketing is done by a
NGO. Even with NGO resources invested in marketing, the number of visitors attracted so far has
been low. In the Ugandan case, market research was highlighted as very valuable, though not
extensive enough. The implication is that marketing emerges as a major challenge for rural tourism
entrepreneurs. In such situations, it is important to link them to an outside institution that can invest
in marketing for the initial period, whether this is a project, NGO, or Government Tourism
Organisation. Market research from early stages onwards is a necessary requirement and invaluable.
Dealing with practical, logistical and implementation challenges
Both projects encountered a conflict between an ambitious design and limited time scale and
resources. Training was delayed or too short and skills development not always sufficient. Project
funding was too short. The implication here is that building rural tourism is a long-term and slow
process, and needs to be planned and resourced as such.
Building local institutions at community level
The Czech project worked directly with new entrepreneurs, while also seeking to encourage local
associations that would co-ordinate the entrepreneurs. These emerged as key elements: where the
association thrived under strong leadership (as in Northern Moravia), the trail has been successful
and continues to operate. Where leadership was lacking and the association weak (as in Southern
Moravia), the trail has not flourished. The Ugandan project focused even more exclusively on
building community institutions rather than entrepreneurs, given the different development context
and the explicit socio-economic and cultural goals of the project. The associations, however, are
micro-organisations, located at each individual site, rather than spanning across, and ‘uniting’ the
‘trail’. The focus on associations may have resulted in relatively little development of
entrepreneurship, or at least slow development of entrepreneurship. However, this has also built the
capacity for collective management of the tourism assets and tourism development. The implication
is that the need for local associations, to unite entrepreneurs or manage collective assets needs to
be assessed and may require substantial investment. This is in addition to direct training and
support of individual entrepreneurs. Whatever the external input, however, some may well grind to
a halt for internal reasons.
Building institutional networks and policy support
Whereas the general picture is that support for rural tourism is better established in Eastern Europe
than sub-Saharan Africa, the situation in the two cases reviewed here was the reverse: the Czech
project struggled to win recognition from the Tourism Board, and even then was constrained by PPT Working Paper 12 Tourism in Poor Rural Areas
35
lack of tangible support, while the Uganda project had strong policy backing from the start. This
made a particular difference to the degree in which a common marketing strategy was developed
and supported. On the other hand however, in terms of visitor arrivals the Heritage Trails in the
Czech Republic have proven to be considerably more successful than the Ugandan trails. In
addition to working directly with tourism policy makers, both projects sought to develop
collaboration with a wider array of institutions: local councils in the Czech Republic, NGO’s in
Uganda. Several considerations suggest that this institutional collaboration was very important:
• In both cases, the initial Heritage Trails are only pilot sites, to act as the basis for wider
replication. Replication depends on uptake of the concept and methods by others rather than
perpetual expansion of a project.
• In both cases, a time-bound fixed-resourced project appeared to be too limited for the rural
development process, making it all the more important that an on-going process to support rural
tourism is built in other institutions.
• While both these cases have marked success in building institutional collaboration, examples
from elsewhere indicate how the lack of institutional co-ordination can block rural tourism. For
example, in South Africa’s Wild Coast, an area of considerable tourism potential, the Amadiba
trail and a new casino are among the very few tourism developments of recent decades.
Ambitious tourism development plans by many different governmental bodies have floundered,
and institutional weaknesses and rivalry have played a key part (Ashley and Ntshona 2002).
Another case study on the northern edge of the Selous National Park in Tanzania highlights
another extreme, where the objective of promoting rural tourism falls between different
institutional mandates. It is neither a priority for national tourism planners, nor the rural
Council, nor the conservationists running the community-based natural resource management
programme or the reserve to take control over promoting rural tourism. This partly explains why
there is no diversification into tourism enterprise in a location adjacent to a key tourism asset
(Ashley, Mdoe and Reynolds, 2002).
Dependency of rural tourism on national tourism developments
In many cases, rural tourism is developed or expanded as a strategy for attracting tourists away
from existing resorts (whether urban or rural) and dispersing them into new areas. In other cases it
may be developed to offer an entirely new package to a new market (e.g. to Dutch campers, not
Prague weekend-trippers, in the case of Czech Heritage Trails). But new tourism products are
dependent, to varying degrees, on the overall growth of tourism, and particularly the image of the
country as a whole, not just the rural area. This is evident in Uganda where perceptions of insecurity
in the country have hampered development of the international market for the heritage trail sites.
Thus the implication is that successful development of rural tourism may be partly dependent on
success of the national tourism product, or at least hampered by constraints or downswings that
affect tourism. The linkage between the new rural product and existing products, whether it is an
add-on for the same market or a new offering for a new market, needs to be identified as part of the
development strategy.
6.2 Can rural tourism contribute to poverty reduction?
Both case studies describe small, recently implemented projects and as such cannot demonstrate
clear successes in creating rural tourism and reducing rural poverty. For some indication, we have
to turn to comparable experience in countries with a longer investment. In Eastern Europe, one of
the most successful examples in developing rural tourism is Hungary. A combination of a
successful national tourism industry, a serious policy commitment to rural tourism, an attractive PPT Working Paper 12 Tourism in Poor Rural Areas
36
rural setting, and many years experience of attracting Western tourists (in particular during the
‘closed-off’ communist days) have generated a well-established and important tourism sector. This
does not mean that all the other East European countries can automatically do the same, particularly
as they entered the post iron-curtain era without an existing western-oriented tourism industry, but it
does suggest that the product potential is there. In sub-Saharan Africa, one comparative example to
turn to is Namibia, where the work of the Namibian Community Tourism Association (NACOBTA)
initially served as a model for the establishment of Uganda’s UCOTA. NACOBTA focuses
exclusively on community tourism, much of which is in the north-east and north-west communal
(rural) areas. While community tourism there is still developing (rapidly in some areas) from a tiny
base, and has its own share of problems, a review of NACOBTA in 2001 concluded that ‘most
CBTEs are making an income that has changed their communities from being poor or very poor to
being better off. This has contributed significantly towards the equitable distribution of resources
between urban and rural communities’ (Nicanor 2001, p34).
Clearly there are cases where tourism is successfully developing and contributes to growth in rural
areas. The extent to which the growth and opportunities generated are pro-poor is a different issue.
As discussed in Section 2, the relative importance of small-scale enterprises and cultural attractions
is likely to enhance opportunities for the poor, but Rogerson’s (2002) analysis of the Highlands
Meander in South Africa issues an important warning note: while the creation of the ‘Meander’ has
been successful in creating and marketing a product, the all-white ownership of, and participation
in, the tourism sector in the area has not been reversed. Thus from a pro-poor perspective, success
needs to be measured in terms of both creating tourism-led growth in rural areas, and in terms of the
distribution of opportunities among the poor and others. PPT Working Paper 12 Tourism in Poor Rural Areas
37
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(4):395-425 London: Blackwell Publishing
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Tour
ism Development: Outline
of Advantages and Disadva
ntages
WE W
Advantage (depending upon implementation some of these can turn into disadvantages)
employment (1 emp/1000 tourist) (labor intensive, few administrative positions, little upward mobility.)
infrastructure development (roads, water, electricity, telecom and cybercom, but not necessarily local priorities.)
cultural preservation (economic incentives to preserve food, fashion, festivals and physical history, but these tend to be superficial elements of a culture.)
environmental protection (econ incentives to preserve nature, wildlife and urban cleanliness)
foreign exchange (generates resources to import food, pharmaceuticals, technology, consumer goods.)
development of health care services (those these aren't always available to local people.)
Disadvantages (depending upon implementation some of these can turn into advantages)
cultural destruction, (modernization (world mono-culture), freezes culture as performers, loss: language, religion, rituals, material culture.)
primary products (sun, sand, surf, safari, suds, ski, sex) (little value added, neo-colonialism)
environmental destruction (game drives, resorts: golf, ski, beach, desert, world as play ground, SUV.)
marginal employment (low skill, low wage, menial services, prostitution, drug trade, gambling, hustlers.)
low benefits (no job security, no health care, no organizing, no work safety rules or enviro standards.)
development of illegal and/or destructive economic activities (markets for drugs, endangered species, etc.)
OULD LOVE
YOUR SUPPORT!
Our content is
provided free a
outside hiring (skilled middle and senior management recruited out of the area and transferred in.)
concentration employment (walled resort enclaves.) seasonal employment outside decision making (decisions made outside of the area, corporate
dollars corrupt government.) unrealistic expectations (divert young people from school and brighter
futures.) anti-democratic collusion (industry support of repressive governments) land controlled by the elite (people relocated, agriculture eliminated,
prohibited from N.P.) negative lifestyle's (STD's, substance abuse, begging, hustling) diverted and concentrated development (airport, roads, water, electricity
to tourist destinations, development not accessible to locals), little forex stays in country (airplanes, vehicles, booze, hot air balloons,
generally have foreign owners), package programs cruises (eat and sleep on board so the economic benefits to the ports-of-
call is very thin and limited.) unstable market (fickle, affected by local and world events, generally
highly elastic) health tourism (traveling to get medical procedure at lower cost) has it
own set of unique challenges, which include: Determining the credential, skills and quality of the facility and personnel. Language communication challenges on topics requiring a lot of details, sometimes even when both parties seemingly speak the same language. Different cultural issues and expectations around health care and the body. Post-treatment complications, after the "tourist" has left the facility.
Solutions (for visitor)
act to support cultural diversity engage in activities that add value to the community don’t do activities that deteriorate the environment don’t engage in illegal activities act to disperse the benefits patronize locally (community) owned enterprises.
Solutions (for the host)
support the traditional cultural legacy training and education in local culture, history, natural science, etc. select development and activities that draw from local traditions and
add value to the community don’t promote activities that deteriorate the environment
s
a public service!
Follow us on Twitter
don’t engage in illegal activities adopt a program to disperse the benefits patronize locally produced products and locally (community) owned
enterprises. make business and foreign exchange transactions transparent and
efficient.
We don't really see a different list of pros and cons for tourism in rural and urban areas. Rural or urban, the result largely depend upon how the business is conducted: Are visitors coming and supporting what the community prides itself in and in a way that perpetuates and sustains (or improves) the quality of life in the community)? Are are the activities of the tourist detrimental to the values, environment and culture of the community in the long run?
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Ab o u t t h e Re p oRt
This report examines the notion that tourism can help deliver
peace and prosperity to developing countries by examining
relationships among tourism, development, and conflict in
three countries: Kenya, Nigeria, and India. The case studies
were commissioned as part of the 2008 Travelers’ Philanthropy
Conference held in Arusha, Tanzania. The three-day conference
was attended by 225 delegates from five continents. Nobel
laureate Dr. Wangari Maathai, founder and leader of Kenya’s
Green Belt Movement, gave the keynote address. USIP’s Center
for Sustainable Economies commissioned the case studies used
in this report from participants attending the workshop.
Martha Honey, co-founder and co-director of the Center for
Responsible Travel (CREST), heads its Washington, D.C., office.
She has written and lectured widely on ecotourism, travelers’
philanthropy, and certification issues and holds a PhD in
African history. Her books include Ecotourism and Sustainable
Development: Who Owns Paradise? Raymond Gilpin is associate
vice president for Sustainable Economies at USIP. He leads the
Institute’s work on analyzing economic relationships during
all stages of conflict. He holds a doctorate from Cambridge
University in the United Kingdom.
The authors are grateful for comments from Professor
Timothy L. Fort, Lindner-Gambal Professor of Business
Ethics and executive director of the Institute for Corporate
Responsibility at George Washington University, and Marie
Pace, program officer at USIP. Go Funai (research assistant,
USIP), Richard Downie (consultant, USIP), and Bethany
Wylie (intern from Stanford University with the Center for
Responsible Travel) also contributed to this paper.
1200 17th Street NW • Washington, DC 20036 • 202.457.1700 • fax 202.429.6063
Sp e c iAl Re p oRt 233 oc t o b eR 2009
© 2009 by the United States Institute of Peace.
All rights reserved.
Martha Honey and Raymond Gilpin
Tourism in the
Developing World
Promoting Peace and Reducing Poverty
Summary
• Although often underestimated, the tourism industry can help promote peace and stability
in developing countries by providing jobs, generating income, diversifying the economy,
protecting the environment, and promoting cross-cultural awareness. Tourism is the fourthlargest industry in the global economy.
• However, key challenges must be addressed if peace-enhancing benefits from this industry
are to be realized. These include investments in infrastructure and human capacity, the
development of comprehensive national strategies, the adoption of robust regulatory
frameworks, mechanisms to maximize in-country foreign currency earnings, and efforts to
reduce crime and corruption.
• The case studies of India, Kenya, and Nigeria reveal several important points. First, relative
peace and a degree of economic development are preconditions for a successful tourist
industry. Second, although it has the capacity to help promote peace and prosperity, tourism can also cause a great deal of harm unless it is carefully developed. Third, to deliver
optimal benefits, tourism must be respectful of the environment and mindful of cultural
and social traditions. Fourth, tourism must be supported by a coherent national strategy
and robust laws.
• For tourism to help deliver prosperity and stabilize communities effectively, specific action
must be taken by three main constituencies: host communities, host governments, and foreign stakeholders. Host communities should work to leverage their competitive advantage,
improve service delivery, and protect their environment and culture. Host governments
should establish supportive strategies, introduce and implement necessary regulations,
remove bottlenecks, and adopt internationally recognized tourism standards. Foreign stakeholders could prioritize tourism as a viable economic force, direct investment to this sector,
and facilitate knowledge and technological transfers.
UNITeD STATeS INSTITUTe of PeACe www.usip.org
SPeCIAL RePoRT
co n t e n tS
Ecotourism 3
About the Case Studies 3
Addressing the Challenges 8
Conclusions 9
Policy Recommendations 92
Tourism is a vital part of the global economy. Generating roughly $1 trillion in global receipts
in 2008 (up 1.8 percent from 2007), international tourism ranked as the fourth-largest
industry in the world, after fuels, chemicals, and automotive products.
1
The breadth of
international travel also has greatly expanded in recent years to encompass the developing
world. In 1950 just fifteen destinations—primarily European—accounted for 98 percent of
all international arrivals. By 2007 that figure had fallen to 57 percent.
2
Once essentially
excluded from the tourism industry, the developing world has now become its major growth
area. Tourism is a key foreign exchange earner for 83 percent of developing countries and
the leading export earner for one-third of the world’s poorest countries.
3
For the world’s
forty poorest countries, tourism is the second-most important source of foreign exchange
after oil.
4
The economic might of the tourist industry has helped transform societies, often for the
better. Tourism has several advantages over other industries:
• It is consumed at the point of production so that it directly benefits the communities that
provide the goods.
• It enables communities that are poor in material wealth but rich in culture, history, and heritage to use their unique characteristics as an income-
generating comparative advantage.
• It creates networks of different operations, from hotels and restaurants to adventure sports
providers and food suppliers. This enables tourist centers to form complex and varied supply
chains of goods and services, supporting a versatile labor market with a variety of jobs for
tour guides, translators, cooks, cleaners, drivers, hotel managers, and other service sector
workers. Many tourism jobs are flexible or seasonal and can be taken on in parallel with
existing occupations, such as farming.
• It tends to encourage the development of multiple-use infrastructure that benefits the host
community, including roads, health care facilities, and sports centers, in addition to the
hotels and high-end restaurants that cater to foreign visitors.
With these benefits in mind, the United Nations has identified the development of tourism
as one of the methods poorer countries might use to meet the Millennium Development
Goals (MDGs).
5
For the first MDG—alleviating poverty—the merits of tourism are evident.
It can provide jobs and generate income for communities that, in some cases, lack viable
alternative means of employment. In an assessment of Nigeria’s potential for tourism,
Francesco Frangialli, the former head of the UN World Tourism Organization, argued that
with its “capacity to spread its socioeconomic benefits to all levels of society … tourism
can be a leading industry in the fight against poverty.”
6
With its tendency to produce flexible labor markets and offer diverse working opportunities, tourism can also help realize a
second MDG, that of promoting gender equality. In Mali, the World Tourism Organization’s
Sustainable Tourism for Eliminating Poverty (ST-EP) program has supported an effort to train
the female artisans of Djenne, one of Mali’s oldest and most visited towns. In Costa Rica,
women’s handicraft cooperatives catering to the tourist market have flourished, providing
many women, for the first time, with both independent incomes and improved self-esteem.
If carefully managed, tourism can also be an important part of promoting a sustainable environment, another of the MDGs. Frangialli identified tourism’s potential for not only protecting the natural environment, but also “preserving historical, archaeological, and religious
monuments; and stimulating the practice of local folklore, traditions, arts and crafts, and
cuisine.”
7
Finally, as tourism by definition involves the transfer of people, culture, and ideas,
it is ideally placed to foster effective global partnerships, the eighth MDG.
In addition to advancing development goals, some have credited tourism with helping to
build and sustain peace. Among them is Wangari Maathai, the Nobel laureate and founder of
The views expressed in this report do not necessarily
reflect the views of the United States Institute of Peace,
which does not advocate specific policy positions.
To request permission to photocopy or reprint materials,
e-mail: [email protected]
Ab o u t t h e inSt i t u t e
The United States Institute of Peace is an independent,
nonpartisan institution established and funded by Congress.
Its goals are to help prevent and resolve violent conflicts,
promote post-conflict peacebuilding, and increase conflict
management tools, capacity, and intellectual capital worldwide. The Institute does this by empowering others with
knowledge, skills, and resources, as well as by its direct
involvement in conflict zones around the globe.
boA Rd o f diRe c t oR S
J. Robinson West (Chair), Chairman, PFC Energy, Washington,
D.C. • George e. Moose (Vice Chairman), Adjunct Professor
of Practice, The George Washington University, Washington,
D.C. • Anne H. Cahn, Former Scholar in Residence, American
University, Washington, D.C. • Chester A. Crocker, James R.
Schlesinger Professor of Strategic Studies, School of Foreign
Service, Georgetown University, Washington, D.C. • Ikram U.
Khan, President, Quality Care Consultants, LLC., Las Vegas,
Nev. • Kerry Kennedy, Human Rights Activist • Stephen D.
Krasner, Graham H. Stuart Professor of International Relations at Stanford University • Jeremy A. Rabkin, Professor
of Law, George Mason University, Arlington, Va. • Judy Van
Rest, Executive Vice President, International Republican
Institute, Washington, D.C. • Nancy Zirkin, Executive Vice
President, Leadership Conference on Civil Rights
MeMb e r s ex Of f i c iO
Hillary Rodham Clinton, Secretary of State • James N. Miller,
Principal Deputy Under Secretary of Defense for Policy • Ann e.
Rondeau, Vice Admiral, U.S. Navy; President, National Defense
University • Richard H. Solomon, President, United States
Institute of Peace (nonvoting)3
the Green Belt Movement, who highlights tourism’s potential as “a great vehicle for peace
promotion.”
8
Whether tourism can actually bring about peace or whether the relationship is
better described as mutually reinforcing, Corazon Gatchalian and Cindi Reiman conclude that
through its tendency to promote “communication between nations and
cultures,” tourism is
an instrument that “creates a global language of peace.”
9
That said, while tourism can bring positive benefits, good does not necessarily follow. In
recent years, tourism has tended to be a delivery mechanism for some of the darker effects
of globalization: health pandemics and terrorism. International travelers enabled the outbreaks of severe acute respiratory syndrome (SARS) and swine flu to spread rapidly across
borders. And holiday destinations, tragically, have become a popular target for terrorists,
who want to maximize civilian casualties and publicity for their actions. In recent years,
Mumbai, Bali, Sharm el-Sheikh, Dahab, Mombasa, and Casablanca have come to be associated as much with mass bombings and killings as with tourism.
ecotourism
While conventional mass tourism often negatively affects host environments, other forms of
tourism have emerged in recent decades that are more sensitive to their surroundings and
offer tangible benefits to the local labor force. These newer forms of tourism have come
to be known as ecotourism, an umbrella term best defined as responsible travel to natural
areas that conserves the environment and improves the well-being of local people.
10
Since it
first emerged in the late 1970s, ecotourism has spawned several other travel concepts that
are, in essence, variations on the same theme. These include geotourism, pro-poor tourism, sustainable tourism, responsible tourism, and travelers’ philanthropy. They are united
by the simple idea that tourism should offer a benefit—and not incur a cost—to the host
community. They reflect the desire of many holiday goers to give something back to the
places they visit, or at the very least, avoid doing them harm. A number of countries have
tailored their tourism industries adeptly to reflect this desire and have reaped economic
rewards while minimizing the environmental and social impacts of growth. Costa Rica led
the way in developing the ecotourism concept, followed closely by Ecuador, Tanzania, Kenya,
and Nepal.
This report explores the ecotourism model, arguing that, if implemented correctly, it can
reduce poverty and promote peace in the developing world. It uses three case studies—Kenya, India, and Nigeria—to explore some of the ways in which tourism can enable peace and
prosperity. It also analyzes some of the necessary preconditions for developing a responsible tourist industry, highlighting that ill-planned and poorly executed tourism can cause
immense damage to communities and create conditions for conflict instead of peace.
About the Case Studies
Kenya, Nigeria, and India are three developing countries with tourism industries at different
stages of maturity. Kenya has a long-established and highly successful tourist sector catering to the conventional and ecotourism markets. As the table demonstrates, international
tourism is a lucrative source of income for Kenya, accounting for 2.24 percent of the nation’s
gross domestic product (GDP) in 2006. By contrast, Nigeria barely has a tourist industry at
all, reflected by tourism’s paltry contribution to national wealth, just .02 percent of GDP in
2006. India has several tourist centers but, given its vast size, it has yet to realize tourism’s
economic potential. International receipts from tourism made up just 0.35 percent of its GDP
in 2006. With the case studies, we examine whether or not tourism in developing countries
has a role in laying down what Martha Honey of the Center for Responsible Travel calls the
While tourism can bring
positive benefits, good does
not necessarily follow. In recent
years, tourism has tended to
be a delivery mechanism for
some of the darker effects of
globalization: health pandemics
and terrorism.4
Tourism Statistics, 1990-2006
Country 1990 1995 2000 2001 2003 2006
Kenya
International arrivals
(thousands)
814 937 1,037 995 1,146 1,840
Nights spent by
residents (thousands)
n.a. n.a. 794 740 739 n.a
International receipts
(millions of U.S. dollars)
443 486 500 536 619 1,182
GDP-PPP (billions
of U.S. dollars)
25.7 31.1 37.4 40.2 43.0 52.7
International receipts
(percent of GDP)
1.72 1.56 1.34 1.33 1.44 2.24
India
International arrivals
(thousands)
1,707 2,124 2,649 2,537 2,726 4,447
Domestic tourism
visits (thousands)
n.a. 136,644 220,107 236,470 309,038 461,763
International receipts
(millions of U.S. dollars)
1,513 2,581 3,718 3,497 4,560 9,227
GDP-PPP (billions
of U.S. dollars)
721.2 1,038.6 1,519.5 1,616.5 1,876.6 2,668.8
International receipts
(percent of GDP)
0.21 0.25 0.24 0.22 0.24 0.35
Nigeria
International arrivals
(thousands)
n.a. 1,031 1,492 1,753 2,253 3,056
Domestic tourism
visits (thousands)
n.a. n.a. n.a. n.a. n.a. n.a.
International receipts
(millions of U.S. dollars)
190 656 813 168 58 51
GDP-PPP (billions
of U.S. dollars)
90.9 105.2 134.0 148.4 206.2 268.2
International receipts
(percent of GDP)
0.21 0.62 0.61 0.11 0.03 0.02
GDP = gross domestic product. PPP = purchasing power parity. n.a. = not available.
Source: World Tourism Organization database.
“building blocks of peace,” defined as “social justice, economic equity, sustainable development, and broad based democracy.”
11
A mixed picture emerges. In Kenya, which has had a longer time to finesse its strategy,
ecotourism is starting to bring about the progress that Honey describes. Conservationist
David Western,
12
the author of a study of Kenya’s tourism industry,
13
explains how Kenya
learned from some of the mistakes it made when it began building its safari-based tourism
industry. He discusses how Kenya became the first country in Africa to establish both an
ecotourism society and a framework for assessing the social and environmental
impact of
resort developments. He also illustrates the importance of generating domestic tourism by
offering free or heavily discounted national park fees to its citizens. Most important, he
shows how Kenyan communities have benefited directly from tourism by running their own
wildlife conservation areas. However, the picture he paints is not overwhelmingly rosy. While
pockets of good practice exist, a fair share of Kenya’s tourism tramples on local customs, is
indifferent to conservation, and fails to pass on economic benefits to host communities.
The Nigeria case study, by Bola Olusola Adeleke,
14
closely examines Honey’s idea of building blocks of peace from the perspective of a country that is still in the formative stages
While pockets of good practice
exist, a fair share of Kenya’s
tourism tramples on local
customs, is indifferent to
conservation, and fails to pass
on economic benefits to host
communities.5
of developing a tourism sector. In her analysis, Adeleke argues that, while tourism may
well promote peace, peaceful conditions have to be in place before tourism can
thrive. The
lack of peace and security, she argues, is the main reason why Nigeria has been unable to
persuade foreigners to visit its many cultural and natural attractions. In addition, she identifies a string of other societal problems—poverty, corruption, a lack of infrastructure—that
contribute to Nigeria’s failure to establish a tourist industry. For Adeleke, Nigeria faces a
catch-22 scenario, whereby tourism has the potential to promote peace and development
but can only take root in areas where peace and development are already present.
The third case study offers a reminder that tourism is not a magic bullet with the ability to transform developing countries for the better. Aditi Chanchani
15
of EQUATIONS, an
Indian nongovernmental organization (NGO) that promotes good practice in the tourism
industry, shows that her country has a lot of work to do in developing a sustainable tourism
model that delivers benefits to local communities. Her examples show that if the tourism
industry is not properly regulated, it can do harm, developmentally, socially, culturally, and
politically. She also argues forcefully that regulations alone are not enough; they have to be
applied and there must be penalties for those who ignore them.
Although Kenya, Nigeria, and India differ significantly in how they have sought to develop tourism, it is possible to draw some common lessons from
their experiences. The first is
that certain levels of peace and economic development are preconditions for tourism. But
tourism, in turn, can strengthen existing conditions of peace and development. However,
everything depends on the way it is managed. As Honey emphasizes, “Tourism promotes
peace only when it is done in ways that involve and benefit the destination.”
16
Ecotourism
could provide a blueprint for managing this process, as it not only builds entrepreneurial
skills at a local level but also links community members to the larger world in ways that create knowledge, understanding, and appreciation of other peoples (e.g., clients, the chain of
marketing, sales, transport). Ecotourism exposes communities to a social network and gives
them both a reason and the skills to manage social networks in order to benefit themselves;
the knowledge and communication linkages that tourism creates, for their part, depend on
and promote fair practices, stability, and peace.
Kenya
East Africa is a natural destination for tourists, boasting the richest and most varied concentration of wildlife on the continent. Kenya spotted the potential for tourism quickly,
opening its first national park in 1947 and building a flourishing industry based around the
safari. Unplanned and unsympathetic development, however, led to Kenya
becoming the
“Costa Brava of the wildlife world,” by the 1990s, providing mass tourism commonly associated with the resorts of the Spanish coast.
17
Since then, Kenya has pursued ecotourism
with more determination, backed by national legislation aimed at protecting wildlife and
representing communities, but Western contends that “for the moment, the worst of tourism
is outstripping the best of ecotourism.”
18
Although progress has been patchy, Western concedes that Kenya’s ecotourism has been
able to deliver concrete benefits to its people. Involving local communities is one of its
central tenets. Thus, admission fees for Kenyans to visit national parks were slashed, providing an important boost to domestic tourism. Ordinary Kenyans also have been involved in
developing tourism in their areas, and through programs such as Parks Beyond Parks, have
been given the lead role in managing and conserving wildlife areas in their own communities. As a result, tourism has helped provide employment and alleviate poverty, the first of
the United Nations’ MDGs. The stronger focus on ecotourism has also aided Kenya’s progress
toward achieving another MDG, that of environmental sustainability.
Ecotourism could provide a
blueprint for managing this
process, as it not only builds
entrepreneurial skills at a local
level but also links community
members to the larger world in
ways that create knowledge,
understanding, and appreciation
of other peoples.6
One of the most important advantages of tourism, according to Western, is that it tends
to have a snowball effect, generating revenue in indirect ways. Donor countries are more
likely to give aid and support to nations that their citizens visit, and where tourists beat
a path, businesses and NGOs often follow. Although difficult to quantify, this hypothesis
merits further study.
In his explanation of the growing importance of ecotourism, Western gives most of the
credit to individual travelers rather than the Kenyan government. Ecotourism, he argues,
reflects “the traveler’s urge to do good.” This enables ecotourism to “grow spontaneously through contagious social responsibility, rather than by rules and regulations and
policies.”
19
In Western’s view, more can be done to capitalize on the willingness of individual travelers to give something back to the communities they visit. The best model for
tourism, he argues, should combine the responsible approach of ecotourism with travelers’
philanthropic impulse to contribute to developing their holiday destinations. Western cites
the example of the African Conservation Fund, the U.S. arm of two domestic NGOs, which
organizes safaris and visits to Kenyan community projects; there, tourists are able to make
tax-deductible charitable contributions.
20
While there is a clear risk that such projects could
fuel a dependency culture, they are a powerful way of directing wealth to communities in
a virtually unmediated way. Kenya’s experience demonstrates that tourism can positively
affect development and help lay down the building blocks of peace, provided it respects
of the environment, works closely with host communities, and harnesses the philanthropic
impulses of overseas visitors.
Nigeria
The story of Nigeria’s tourism industry is one of unfulfilled potential, according to Adeleke.
21
Theoretically, the country is tailor-made for tourism: Its 370 ethnic groups give it a rich
cultural heritage and it is blessed with natural wonders, unique wildlife, and a very favorable
climate. Yet very little effort has been undertaken at the national level to develop tourism.
Nigeria did not establish an official tourist board until 1976 and only in the 1990s did it
formulate a national tourism policy. Most foreign visitors come to Nigeria for business or
family visits.
What is the reason for this oversight? According to Adeleke, the enabling environment
for tourism simply does not exist. For tourism—particularly international tourism—to
flourish, a nation needs to be peaceful and safe. For most of its postindependence history,
Nigeria has been a byword for political instability, violence, ethnic rivalry, and crime. The
challenges of marketing its tourist credentials are laid bare by the U.S. State Department
advisory for the country, which gives even the most intrepid traveler pause. U.S. citizens are
warned of the dangers of “violent crime in Lagos and other large cities as well as on roads
between cities,” the prevalence of “armed muggings, kidnappings and carjackings,” and the
risk of ethnic conflict. They are urged to avoid “all but essential travel” to the Niger Delta,
the scene of years of violence among local citizens, international oil companies, and the
Nigerian military.
22
Tourism, if established, could help promote peace. In addition, a robust
tourist sector would diversify the economy, reducing Nigeria’s dependence on its most
important export—oil—which is also the source of many of the country’s social, political,
economic, and environmental problems. Clearly, however, tourism cannot gain a foothold in
societies that are prone to conflict and instability.
Moreover, to thrive, tourism requires more than just an absence of conflict. Adeleke
points to several other structural problems within Nigeria that complicate efforts to build
a strong tourism sector. Poor infrastructure is a particular barrier. Nigeria is a large country
with a small and badly maintained road network. Tourists would struggle to travel between
Tourism tends to have a
snowball effect....Donor
countries are more likely to give
aid and support to nations that
their citizens visit, and where
tourists beat a path, businesses
and NGOs often follow.
A robust tourist sector would
diversify the economy, reducing
Nigeria’s dependence on oil, the
source of many of the country’s
social, political, economic, and
environmental problems.7
different regions. Parts of the country, such as the Niger Delta, are almost completely cut
off (and dangerous). Poverty hinders domestic tourism, but even those who have the means
have not developed a culture of travel. Another important barrier to tourism is the absence
of organization and institutional capacity at a national level. For most of its history, Nigeria has not had a national tourism strategy, and government departments overlap at the
national and regional levels regarding responsibility for the sector, making it difficult to
devise a coordinated plan. The government does not even possess reliable figures on the
numbers of international arrivals to and departures from the country. Corruption is another
serious deterrent, as it undermines government efficiency, deters potential investors in the
tourism industry, and scares off visitors.
In sum, while tourism can be of enormous benefit to developing nations, setting up a
fully functioning tourist industry is beyond the capacity of many. Without a modicum of
peace and stability, combined with strategic planning at a national level, a country will
struggle to persuade tourists to risk a visit.
India
Aditi Chanchani’s case study of India illustrates the tensions that could exist among tourism,
development, and peace. While sustainable and responsible tourism could promote development, poorly implemented projects that do not consider local rights and opinions can hobble
development and sow the seeds of conflict.
Despite its vast size and wealth of cultural and natural attractions, India has not been
able to turn tourism into a major dynamo of its economy. Tourism has developed in pockets:
in Goa, Kerala, and the central region around New Delhi, for example, rather than in the
country as a whole. India suffers from some of the obstacles Nigeria faces. Travel infrastructure is patchy, much of the population is poor, and the national government has struggled
to provide a strategic vision for the tourism sector. In addition, safety has become a more
prominent concern for tourists, following a series of terrorist attacks that targeted highprofile sites frequented by foreign visitors. The coordinated attacks in Mumbai in November
2008 ended the steady rise in international arrivals seen since 2002. It is too early to assess
the attacks’ full effect, but tourist numbers were expected to fall approximately 15 percent
during 2009 in the wake of both the attacks and the global economic recession.
23
For Chanchani, tourism has too often failed to pass on economic and social benefits to
host communities because the national strategy has been fixated on numbers—
what she
calls “arrivals, expenditures and receipts.”
24
Many tourist developments are owned by outside investors looking to make quick profits rather than provide sustainable growth over the
long term. As a result, Chanchani believes that tourism has undermined efforts to fulfill the
MDGs. Gender equality has been negatively affected by some of the social problems associated with mass tourism, such as wage exploitation and prostitution. Unplanned and poorly
implemented tourist resorts, golf courses, and amusement parks have caused ecological
damage, setting back attempts to meet the United Nations’ MDG on environmental sustainability. Chanchani shows that insensitive tourist developments can displace people and
destroy traditional livelihoods, leaving many with no alternative but to take up low-paying
and exploitative jobs in the tourist sector.
Chanchani acknowledges that tourism can promote peace, but adds that “for this to be
possible one must engage with the reality, the history and the aspirations of those in the
places that are being visited.”
25
Too often, the negative face of tourism stokes conflict.
Chanchani cites the example of India’s central belt, a region that has been targeted for tourism development where communities have been moved off their ancestral lands to make way
for what are billed as ecotourism projects. These disputes feed into a long-
running Maoist
While tourism can be of
enormous benefit to developing
nations, setting up a fully
functioning tourist industry is
beyond the capacity of many.
Insensitive tourist developments
can displace people and destroy
traditional livelihoods, leaving
many with no alternative but
to take up low-paying and
exploitative jobs in the tourist
sector.8
insurgency, which has turned increasingly violent as the region has been opened up.
Chanchani argues that lax regulations are largely to blame for the problems facing tourism in her case study. The government fails to properly police the tourism industry, allowing
some local developers to disregard the rules and the wishes of local communities. India’s
environmental legislation is designed to protect ecologically fragile areas from development, but it has been watered down or simply ignored. In Goa, resorts and hotels have
sprung up along the coast in clear violation of the rules. Chanchani also criticizes the state
governments of Maharashtra and Himachal Pradesh for bending strict land
ownership rules
to clear the way for large tourist developments. Many of these projects have been carried
out under the banner of ecotourism, yet emphatically do not preserve the local environment
or benefit local people, who are rarely consulted and, in some cases, are shunted off their
land to make way for luxury hotels, ski resorts, and amusement parks. The example of India
suggests that tourism cannot help alleviate poverty and promote peace unless it is properly
regulated and genuinely engages with host communities.
Addressing the Challenges
If tourism is to achieve its full potential as a force for promoting peace and prosperity,
several challenges must be addressed:
• Bad neighborhood effect: The case study of Nigeria shows that peace and security are preconditions for a thriving tourism sector. Travelers are risk averse and do not wish to spend
their vacation feeling anxious about their personal safety, mindful of their belongings, and
wary of being ripped off. Developing countries with ambitions to build a successful tourist
industry need to tackle internal instability and provide a safe environment for potential
visitors. Unfortunately, unrest and instability in neighboring states are also disincentives
to travel to potential tourist destinations. Countries that are perceived to be in so-called
bad neighborhoods are affected by this.
• Investments: Solid infrastructure is another precondition for any country wishing to establish a tourism industry. Poor countries need to prioritize the search for capital investment
to help them build the roads, airports, hotels, and leisure facilities needed to attract visitors
in large numbers. Investments in human capacity are equally important. Local communities
need special training to work in the international hospitality industry. Local drivers may
have to meet more exacting safety standards to chauffeur tourists around than might be
expected of them in the domestic market. The hotel industry expects that people who work
with foreign visitors be culturally aware of and sensitive to the expectations and foibles of
a wide range of nationalities. All of this requires training.
• Regulations and standards: The India case study demonstrates that tourism needs to be
subject to robust laws and regulations if it is to benefit local communities and prevent
them from being exploited. Laws must protect the environment from overdevelopment and
safeguard the land, property, and livelihoods of communities affected by tourism. But laws
in themselves are insufficient: They must be applied and enforced. This requires the presence of strong and effective institutions, at national and local levels.
• Structural leakages: Developing countries must try to capture more tourism spending and
limit leakage if they are to maximize their revenues from tourism. An international hotel
chain that opens up in a developing country may create jobs in the local community, but
it repatriates the profits. In a similar way, host communities might decide that, to keep
tourists happy, they have to offer them food and drink they are familiar with—which has
to be imported. Homegrown tourism, on the other hand, allows revenue to remain in the
domestic economy rather than seep across borders. 9
• Ecotourism, not tourism numbers: Governments need to emphasize implementing the sound
principles and best practices of ecotourism rather than fixating on increasing tourism
numbers. High-quality ecotourism can bring more revenue and decrease the harmful social
and environmental effects of uncontrolled mass tourism. Four decades ago, resort tourism
was the norm and model. Today, a variety of alternative tourism models provide the tools
to bring prosperity and strengthen conditions for peace in poor countries.
• Strategic oversight: Tourism cannot grow into a thriving sector of the economy without
constructive leadership from the national government. Too many countries fail to reap
the rewards of tourism because of poor planning, poorly thought-out strategies, and
fragmented policies. Strategic oversight includes everything from overall budget planning
and encouraging outside investment to educating host communities. Without guidance
from local and national governments, host communities are likely to find the experience
unsettling and negative.
Conclusions
Tourism is a thriving global industry with the power to shape developing countries in both
positive and negative ways. The tourism sector has remained robust despite the transnational challenges posed by terrorism, health pandemics, and the global financial crisis. In
2007, international tourist arrivals passed 900 million; the United Nations predicts they will
reach the 1 billion mark by 2010.
26
It is up to developing nations to seize the economic
opportunities that foreign visitors present, and some countries have proved more adept
than others at doing so. Kenya has developed a lucrative tourism sector, powered in recent
years by ecotourism, and some local communities have benefited directly through social and
economic development. India’s attempts to build a sustainable tourism sector have been
undermined by lax regulations, unplanned development, and insensitive attitudes toward
host communities, many of which have not seen any tangible benefits. In Nigeria, structural
weaknesses, insecurity, and poor leadership have locked the country out of the
benefits that
tourism can offer.
The three case studies demonstrate that while tourism can be a force for good—both in
alleviating poverty and helping to cement peace—much depends on the way the sector is
planned and managed. Tourism can only achieve the above goals if it respects the environment and places host communities at the center of the development process. Responsibility
lies with the governments of developing nations to ensure that tourism grows in a sustainable manner. But, as the case study of Kenya shows, individual tourists also have a part
to play. As the driving force behind the ecotourism movement, they have shown that the
choices they make as consumers can determine whether tourism takes a path that helps or
hinders development in poorer countries.
Policy Recommendations
As delineated above, tourism, if properly planned and managed, can help to alleviate poverty and stabilize communities. For that to happen, positive action must be taken by three
main constituencies: host communities, host governments, and foreign stakeholders.
Host communities should:
• Leverage advantage. Communities should know where their comparative advantage lies—
whether it is in wildlife, waterfalls, or wineries—and focus their development strategy
around it, rather than expanding into areas that they think will attract visitors
but with
which they are unfamiliar.
While tourism can be a force
for good—both in alleviating
poverty and helping to cement
peace—much depends on the
way the sector is planned and
managed.10
• Focus on keeping themselves at the center of their development strategy. This will ensure
local ownership of projects and help to keep profits in house. Community-based tourism
is also more sustainable and helps to provide the type of authentic experience that most
tourists are looking for.
• Work on enhancing capacity, in both physical infrastructure and human capital. To fund these
improvements, communities should follow the approach advocated by David Western
27
and
target the enormous potential that travelers’ philanthropy presents.
• Protect the environment and culture. Communities should remember at all times that it is
the beauty of the surroundings in which they live, the richness of their culture, and the
diversity of their wildlife that attracts visitors in the first place. A percentage of the wealth
that tourism generates should be spent to preserve these qualities.
Host governments should:
• Establish national tourism strategies and put in place robust laws to protect tourist sites
and people who work in the tourist industry. They should also ensure that these laws are
enforced. National standards should be established for the tourism industry and its employees should receive periodic training and guidance.
• Address bottlenecks and constraints. In many developing countries, tourism is undermined
because no single government branch has overall responsibility for it. A government should
ensure that its tourism sector is not undermined by competing or overlapping departments,
at either the national or local levels.
• Have a creative marketing strategy for the tourist industry. The global tourism trade is highly
competitive. Developing countries need to think about what sets them apart from other
potential destinations and focus on marketing these distinctive qualities. Having a clear
focus will also make it easier to attract foreign investment and visitors.
foreign stakeholders should:
• Prioritize tourism as an economic force. Tourism is a hugely influential and profitable industry
and many developing countries are keen to be a part of it. However, they are
short of capital
and infrastructure. Foreign firms can provide both and earn a profit at the same time.
• Facilitate knowledge and technology transfers and offer technical assistance. Fledgling tourism sectors in developing countries need assistance in training staff and teaching new
skills. Foreign experts from established tourist markets are well placed to offer assistance.11
Notes
1. UN World Tourism Organization (UNWTO), Tourism Highlights, 2008 Edition (Madrid: UNWTO, 2008) and World
Tourism Barometer (June 2009).
2. UNWTO, Tourism Highlights, World Tourism Barometer.
3. Lisa Mastny, Treading Lightly: New Paths for International Tourism, Worldwatch Paper 159 (Washington, DC:
Worldwatch Institute, 2001), p. 15.
4. Mastny, Treading Lightly, p. 37.
5. The MDGs are to eradicate extreme poverty and hunger, achieve universal primary education, promote gender
equality and empower women, reduce child mortality, improve maternal health, combat HIV/AIDS and other
diseases, ensure environmental sustainability, and develop a global partnership for development, all by 2015.
6. Message by the Secretary-General, in Nigeria Tourism Development Master Plan: Institutional Capacity Strengthening
to the Tourism Sector in Nigeria (Madrid: UNWTO, 2006).
7. Secretary-General, Nigeria Tourism.
8. Keynote address to the Travelers’ Philanthropy Conference, Arusha,
Tanzania, December 2008.
9. Corazon Gatchalian and Cindi Reiman, “Opportunities to Provide World Peace Through Structured Training in
Hospitality.” Presented to the American Hotel and Lodging Association, Michigan, 2005.
10. Definition provided by the International Ecotourism Society.
11. Martha Honey, “Tourism: Preventing Conflict, Promoting Peace,” paper commissioned for USIP, p. 2.
12. David Western is founder and chairman of the Africa Conservation Centre in Nairobi, the former director of the
Kenya Wildlife Service, and the first board chair of the International Ecotourism Society (TIES).
13. David Western, “Ecotourism, Conservation and Development in East Africa: How the Philanthropic Traveler Can
Make a Difference.” Paper commissioned for 2008 Travelers’ Philanthropy Conference, Arusha, Tanzania. Available
from the Center for Responsible Travel (www.responsibletravel.org).
14. Bola Olusola Adeleke is a lecturer in the Department of Transport and Tourism Studies at Redeemer’s University
in Redemption City, Oye State, Nigeria.
15. EQUATIONS is a research, policy advocacy, and campaigning organization working on tourism issues in India with
the aim of promoting people-centered forms of tourism that are nonexploitative, sustainable, and equitable.
16. Honey, “Tourism,” p. 6.
17. Western, “Ecotourism,” p. 6.
18. Ibid, p. 9.
19. Ibid, p. 6.
20. Ibid, p. 11.
21. Bola Olusola Adeleke, “Peace and Tourism in Nigeria.” Paper commissioned for 2008 Travelers’ Philanthropy
Conference, Arusha, Tanzania. Available from the Center for Responsible Travel (www.responsibletravel.org).
22. U.S. Department of State, “Travel Warning: Nigeria,” December 2, 2008, available at http://travel.state.gov/
travel/cis_pa_tw/tw/tw_928.html (accessed September 6, 2009).
23. Aditi Chanchani, “Tourism in India: Role in Conflict and Peace,” p. 1. Paper commissioned for 2008
Travelers’ Philanthropy Conference, Arusha, Tanzania. Available from the Center for Responsible Travel (www.
responsibletravel.org).
24. Ibid.
25. Ibid, p. 8.
26. UNWTO, Tourism Highlights, p. 1.
27. See Western, “Ecotourism.”of Related Interest
• Blood Oil in the Niger Delta by Judith Asuni (Special Report, August 2009)
• Crisis in the Niger Delta by David R. Smock (USIPeace Briefing, September 2009)
• Beyond Emergency Responses in the Democratic Republic of Congo by Raymond Gilpin, Catherine Morris and Go Funai (USIPeace Briefing, August 2009)
• My Kashmir: Conflict and the Prospects for Enduring Peace (2008) by Wajahat Habibullah
• Promoting Cross-LoC Trade in Kashmir by Moeed Yusuf (Special
Report, August 2009)
• Faith and Politics in Nigeria (2008) by John N. Paden
United States
Institute of Peace
1200 17th Street NW
Washington, DC 20036
www.usip.org
An online edition of this and related
reports can be found on our Web site
(www.usip.org), together with additional
information on the subject.
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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.
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.
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.
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 transportone 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
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ENVIRONMENTAL IMPACTS OF TOURISMHOW TOURISM CAN CONTRIBUTE TO ENVIRONMENTAL CONSERVATION
The tourism industry can contribute to conservation through:
Financial contributions
Direct financial contributions Tourism can contribute directly to the conservation of sensitive areas and habitat. Revenue from park-entrance fees and similar sources can be allocated specifically to pay for the protection and management of environmentally sensitive areas. Special fees for park operations or conservation activities can be collected from tourists or tour operators.
The tour operator Discovery Initiatives, which is a member of the Tour Operators Initiative for Sustainable Tourism Development, makes an annual financial contribution to the Orangutan Foundation of some US$ 45,000. The money is earned from only 5 tour groups of 10 people each visiting the Tanjing Putting National Park in Central Kalimantan. The park is under huge pressures from deforestation and river pollution from unrestricted gold mining. This money directly funds park staff and rangers, rehabilitation efforts for young orangutans, and the care center. It provides almost the only economic support for saving this park, where the park fees are officially only the equivalent of 12 pence a day.
Contributions to government revenues Some governments collect money in more far-reaching and indirect ways that are not linked to specific parks or conservation areas. User fees, income taxes, taxes on sales or rental of recreation equipment, and license fees for activities such as hunting and fishing can provide governments with the funds needed to manage natural resources. Such funds can be used for overall conservation programs and activities, such as park ranger salaries and park maintenance.
The Seychelles in the Indian Ocean is introducing a US$ 90 tax on travelers entering the Seychelles. Revenue will be used to preserve the environment and improve tourism facilities. (UNEP, report to the CSD, 1999)
In West Virginia (US) a whitewater rafting tax is collected from everyone who participates in a commercial rafting trip. The fee goes toward studying the environmental impacts of rafting. In addition, the rafting companies participate in several river cleanup days each year. (EPA)
In Belize, a US$ 3.75 departure tax goes directly to the Protected Area Conservation Trust, a Belizean fund dedicated to the conservation of the barrier reef and rainforest. (The International Ecotourism Society)
For Costa Rica, for example, tourism represents 72% of national monetary reserves, generates 140,000 jobs and produces 8.4% of the gross domestic product. The country has 25% of its territory classified under some category of conservation management. In 1999, protected areas welcomed 866,083 national and foreign tourists, who generated about US$ 2.5 million in admission fees and payment of services.
Improved environmental management and planning
Sound environmental management of tourism facilities and especially hotels can increase the benefits to natural areas. But this requires careful planning for controlled development, based on analysis of the environmental resources of the area. Planning helps to make choices between conflicting uses, or to find ways to make them compatible. By planning early for tourism development, damaging and expensive mistakes can be prevented, avoiding the gradual deterioration of environmental assets significant to tourism.
Cleaner production techniques can be important tools for planning and operating tourism facilities in a way that minimizes their environmental impacts. For example, green building (using energy-efficient and non-polluting construction materials, sewage systems and energy sources) is an increasingly important way for the tourism industry to decrease its impact on the environment. And because waste treatment and disposal are often major, long-term environmental problems in the tourism industry, pollution prevention and waste minimization techniques are especially important for the tourism industry. A guide to sources of information on cleaner production (free) is available here.
Environmental awareness raising
Tourism has the potential to increase public appreciation of the environment and to spread awareness of environmental problems when it brings people into closer contact with nature and the environment. This confrontation may heighten awareness of the value of nature and lead to environmentally conscious behavior and activities to preserve the environment. For instance, Honduran schoolchildren from the capital city of Tegucigalpa are routinely taken to visit La Tigra cloud forest visitor center, funded in part by eco-tourist dollars, to learn about the intricacies of the rainforest.
If it is to be sustainable in the long run, tourism must incorporate the principles and practices of sustainable consumption. Sustainable consumption includes building consumer demand for products that have been made using cleaner production techniques, and for services - including tourism services - that are provided in a way that minimizes environmental impacts. The tourism industry can play a key role in providing environmental information and raising awareness among tourists of the environmental consequences of their actions. Tourists and tourism-related businesses consume an enormous quantity of goods and services; moving them toward using those that are produced and provided in an environmentally sustainable way, from cradle to grave, could have an enormous positive impact on the planet's environment.
Protection and preservation
Tourism can significantly contribute to environmental protection, conservation and restoration of biological diversity and sustainable use of natural resources. Because of their attractiveness, pristine sites and natural areas are identified as valuable and the need to keep the attraction alive can lead to creation of national parks and wildlife parks.
In Hawaii, new laws and regulations have been enacted to preserve the Hawaiian rainforest and to protect native species. The coral reefs around the islands and the marine life that depend on them for survival are also protected. Hawaii now
has become an international center for research on ecological systems - and the promotion and preservation of the islands' tourism industry was the main motivation for these actions. (Source: Mundus)
Grupo Punta Cana, a resort in the Dominican Republic, offers an example of how luxury tourism development and conservation can be combined. The high-end resort was established with the goal of catering to luxury-class tourists while respecting the natural habitat of Punta Cana. The developers have set aside 10,000 hectares (24,700 acres) of land as a nature reserve and native fruit tree garden. The Punta Cana Nature Reserve includes 11 fresh water springs surrounded by a subtropical forest where many species of unusual Caribbean flora and fauna live in their natural state. Guests can explore a "nature path" leading from the beach through mangroves, lagoons of fresh water springs and dozens of species of Caribbean bird and plant life. The Punta Cana Ecological Foundation has begun reforesting some parts of the reserve that had been stripped of their native mahogany and other trees in the past. Other environmentally protective policies have been put into effect at the resort, such as programs to protect the offshore barrier reefs and the recycling of wastewater for use in irrigating the grounds. The fairways of the resort's new golf course were planted with a hybrid grass that can be irrigated with sea water The grass also requires less than half the usual amounts of fertilizer and pesticides. The resort has also established a biodiversity laboratory run by Cornell University.
Tourism has had a positive effect on wildlife preservation and protection efforts, notably in Africa but also in South America, Asia, Australia, and the South Pacific. Numerous animal and plant species have already become extinct or may become extinct soon. Many countries have therefore established wildlife reserves and enacted strict laws protecting the animals that draw nature-loving tourists. As a result of these measures, several endangered species have begun to thrive again.
In the Great Lakes region of Africa, mountain gorillas, one of the world's most endangered great apes, play a critical ecological, economic and political role. Their habitat lies on the borders of northwestern Rwanda, eastern Democratic Republic of Congo and southwestern Uganda. Despite 10 years of political crisis and civil war in the region, the need for revenue from ape-related tourism has led all sides in the conflict to cooperate in protecting the apes and their habitat.
Establishment of a gorilla tracking permit, which costs US$ 250 plus park fees, means that just three habituated gorilla groups of about 38 individuals in total can generate over US$ 3 million in revenue per year, making each individual worth nearly US$ 90,000 a year to Uganda. Tourism funds have contributed to development at the local, national and regional level. The presence of such a valuable tourism revenue source in the fragile afromontane forests ensures that these critical habitats are protected, thus fulfilling their valuable ecological function including local climate regulation, water catchment,and natural resources for local communities. Source: UNEP Great Apes Survival Project and Discovery Initiatives
Alternative employment
Tourism can provide an alternative to development scenarios that may have greater environmental impacts. The Eco-escuela de Español, a Spanish language school created in 1996 as part of a Conservation International project in the Guatemalan village of San Andres, is an example. The community-owned school, located in the Maya Biosphere Reserve, combines individual language courses with home stay opportunities and community-led eco-tours. It receives around 1,800 tourists yearly, mostly from the US and Europe, and employs almost 100 residents, of whom around 60%
were previously engaged in mostly illegal timber extraction, hunting and milpasmonitoring in 2000 has shown that, among the families benefiting from the business, the majority has significantly reduced hunting practices, and the number and extension of "slash-and-burn" agricultural plots. Furthermore, as most families in the village benefit directly or indirectly from the school, community-managed private reserves have been established, and social pressure against hunting has increased.
Awareness raising and alternative employment: the orangutan viewing centre at Bohorok, IndonesiaObserving wild and semi-wild orangutans in their natural habitat is a significant environmental education opportunity for large numbers of domestic visitors. To enhance this education experience, the existing station at Bohorok, North Sumatra is to be transformed from a rehabilitation center into an orangutan viewing center, thus offering another, crucial contribution to the sustainable conservation of the rainforest ecosystem. By developing ecotourism for orangutan viewing under the new project, all visitors will gain a rewarding personal experience from orangutans, wildlife and the rainforest ecosystem in general. This will increase their awareness of the importance of rainforest conservation. Moreover, tourism will continue to provide a major source of income for the local population, thus promoting sustainable forest utilization as a genuine alternative to timber exploitation and the poaching and trade of wildlife. Source: Sumatran orangutan conservation programme
Regulatory measures
Regulatory measures help offset negative impacts; for instance, controls on the number of tourist activities and movement of visitors within protected areas can limit impacts on the ecosystem and help maintain the integrity and vitality of the site. Such limits can also reduce the negative impacts on resources.
Limits should be established after an in-depth analysis of the maximum sustainable visitor capacity. This strategy is being used in the Galapagos Islands, where the number of ships allowed to cruise this remote archipelago is limited, and only designated islands can be visited, ensuring visitors have little impact on the sensitive environment and animal habitats.