Fundamentals of Tourism and

Hospitality Management

Chapter-03:

Learning Objectives:
• Why tourism impacts are important for the tourism planners and academicians?
• Learn the various types of impacts and their consequence on the community.
• Examine the economic, social and environmental impacts of tourism.
• Learn the community attitude and perception about tourism development.
• Know the positive and negative impacts of tourism development

Introduction

The long term sustainability of tourism depends on the capability of tourists, community people,
community leaders, tourism professionals and government to take full advantage of its benefits
and minimize its costs. For decades, the growth of tourism industry has been the most important
contributor to increase economic activity throughout the world. Besides that tourism has also
contributed to the social, cultural and environmental aspects of the country.

Tourism has created jobs for the community people and it is a major industry in many countries.
Besides, it is one of the most dominant economic activities in some communities. However, the
impacts of tourism to a local community are not broadly understood – even where tourism is
rising significantly. Most of the people think tourism in terms of economic impacts, jobs
creation, and taxes collection. However, the dimension of impacts from tourism is wide-ranging
and tourism also influences the sectors which are not commonly associated with it. In a broad
sense, tourism impact can be classified in three ways. They are:
 1. Economic
2. Environmental
3. Social and cultural

Each category of tourism impact consists of both positive and negative impacts. As you know
that every community or society has owned different resources than others. For that reason not
all tourism impacts are similarly applicable to every community. Tourism destination planner
must be sensitive, visionary and must avoid critical issues that negatively impact on the overall
environment. They must work for balancing the tourism development work that positively
impact on the community. Moreover, tourism like all other business must give surety that its
products will attract customers. This chapter will discuss the various impacts of the tourism to
the country and the society.

Economic Impacts of Tourism

Economic Impacts of Tourism

Positive Impacts Negative Impacts

• Tourism contributes to the income, lifestyle • Increases price of goods and services at the

and standard of living of the local people destination area

• Improves local economy condition • Increases price of land, daily goods and

• Improves overall transport network in the home housing facilities

country • Intensify the cost of living

• Enhances tax revenues for the government • Increases outside labor supply

• Increases infrastructure and utilities for the • Increases cost for infrastructure like water,

local people sewer, power, fuel, medical, etc.

• Increases new business opportunities • Increases road maintenance and transportation

• Increases employment opportunities for the systems costs

home community • Increases seasonal unemployment issues for the

• Increases investment and development employee

activities in home country • Increases the price of property like land

• Profits may be exported by non-local owners

• Jobs may pay low wages

Visitor spending and economic impact of tourism

The economic significance of tourism to a destination is generally appreciated and calculated. A visitor

may spend lots of money in different sectors that directly or indirectly impact on the destination economy.

Sector Impact Effect

Accommodation
Entertainment
Production
Visitor Recreation
spending Direct / indirect / Jobs
Retail Trade
Food and beverage induce Wage
Transportation Taxes
Culture, Sports and
Recreational Services

Figure….: Visitor spending and economic impact of tourism

The above figure shows that visitors spending on different service sectors like accommodation,

transportation, entertainment, recreation, retail business, food and beverage and cultural, sports and

recreational services . After that these service sectors directly or indirectly impact on the production

process, creates new jobs, provides wages and salaries and provides taxes for the government. Tourism

economic impacts also capture the critical secondary benefits to the tourism supply chain and the
economic gains through the local spending of tourism wages. This provides a comprehensive view of

tourism-generated sales, production, employment, wages, and taxes.

Direct, Indirect and Induced Effects

I. Direct effects: Direct effects are production changes associated with the immediate effects of

changes in tourism expenditures. Direct effects on travel and tourism denote visitors direct

spending on travel related services like accommodation, transportation, entertainment, attraction

and other services. 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.

II. Indirect effects: 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.

III. Induced effects: 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.
Environmental Impacts of Tourism

Environmental Impacts of Tourism

Positive Impacts Negative Impacts

• Protection for the natural environments because • Increase pollution like (air, water, noise, solid

these are asset for the destination waste and visual) for tourism development

• Take preventive action for further ecological • Loss of natural resources like lands and natural

decline of resources landscape to tourism development

• Preservation of historic buildings and • Demolition of flora and fauna

monuments for tourism • Degradation of landscape, historic sites and

• Improvement of the area’s landscape for the monuments

visitors • Causes water shortages for overuse

• Prevention of ecological balance of the • Disruption of wildlife breeding cycles and

destination area behaviors

Social and Cultural Impact

Social and cultural Impacts of Tourism

Positive Impacts Negative Impacts

• Increases quality of life of the local people • Excessive drinking, alcoholism, gambling and

• Facilitates meeting visitors and know their other crimes

culture • Increased smuggling

• Positive changes in values and customs • Language and cultural conflict between host

between visitors and local people and guest

• Facilitate cultural exchange • Unwanted lifestyle changes at the destination

• Improves understanding of different • Dislocation of residents for tourism

communities development

• Preserves cultural identity of host population • Increases Crime, drugs, prostitution

• Increases demand for historical and cultural • Negative changes in values and customs

exhibits • New evolve of modify social structure

• Greater tolerance of social differences between • Natural, political, and public relations

various groups calamities

Community Attitude

Local community attitude towards the tourism development is important for tourism development. If the

visitors are satisfied that is pride for the local community. On the other hand, if local community are

satisfied with the tourism development that encourage them to participate in tourism activities. Tourists

are using the local community resources when they visit a particular place. As tourism develops, local
residents will enjoy more facilities and a greater range of choices. Tourism activities and events tend to

make living in a place more interesting and exciting.

However, heightened tension and community divisiveness can occur over tourism development that occur

tourism supporters against non-supporters. Also, tension between residents and tourists can occur. People

will often feel stressed over the new, increasingly hectic community and personal pace of life. They may

claim the result is no better than before or perhaps even worse. Where culture is part of the tourist

attractions, over-amplification of cultural traits and creation of "new" cultural traits to satisfy tourist tastes

may create a phony culture. Residents may experience a sense of exclusion and alienation over planning

and development concerns. They may feel a loss of control over the community's future as "outsiders"

take over establishments and new development. Over-dependence on non-local developers and an influx

of outside businesses creates a sense that the community is being manipulated and exploited by outsiders

for the sole benefit of those developers or business people. Hotels built in massive cubes or restaurants

with standardized franchise designs might clash with local standards and disrupt the aesthetic appearance

of the community, damage unique community character, and spread "sameness."

Community Attitude

Positive Impacts Negative Impacts

• Heightens pride in community • Heightens community divisiveness

• Greater appreciation of local resources • Increasingly hectic community and personal

• More facilities and range of choices available life w Creates a phony folk culture

• More interesting and exciting place to live • Residents experience sense of exclusion and

alienation over planning and development

concerns

• Feeling of loss of control over community

future (caused by outsider development)

 • New building styles fail to "fit" community

Questions

1. What is meant by impact of tourism?

2. “Tourism industry generates substantial economic benefits to both host countries and tourists'

home countries”- clarify this statement with suitable example.

3. Describe the economic impacts of tourism in your local community.

4. “The social and cultural impacts of tourism must be carefully considered as impacts can either

become assets or detriments to communities”- What are the socio-cultural impacts of tourism?

5. How can we minimize the negative socio-cultural impacts of tourism in Bangladesh?

6. What are the environmental impacts of tourism? How can we minimize the negative socio-

cultural impacts of tourism in Bangladesh?

7. How does visitors’ spending impact on the tourism?

8. What do you mean by direct, indirect and induced economic impact?

9. What are the major tourism impact areas on environment?

10. Identify and describe the impact of tourism in terms of your local community.