People and Economic Activity
Definition: A complex productive activity that involves human behaviour, use of resources
and interaction with other people, economies and environments. Involves physical and
temporary movement of tourists to alternate locations. Can be for recreation, business or
health thus hard to define. Many services are utilised, therefore it is an economic activity.
The Nature of Tourism
o Largest industry in the world – increasing since WW2 due to technology and
globalisation
o Development closely linked with increase in consumption in developing countries
and corresponding rises in household incomes
o WTO estimates 808 million tourists in 2005 to 1 billion in 2010 to 1.6 billion in 2020 –
due to increased accessibility through Tech. (planes)
Uluru
Few visitors in 40s and 50s due to poor tourist facilities
Facilities improved (camping grounds, better roads) = ^ T
Now, large airport, complex road system, guides and tourist businesses – T is
more popular than before demonstrating impact of technology on T
o Contributes to GDP, employment, investment, foreign exchange  economic growth
o Decentralised industry diversifies employment as increase opportunities have social,
ecological and economic effects
o Places huge pressure on biophysical and built environment through productive
activities e.g. consumption of g+s, transport, accommodation, entertainment,
cultural sites, souvenirs/retailers – generates income + creates jobs
o Dependent on economic activities supplying inputs for consumer durables (cars,
recreations, equipment)
Spatial Patterns
o Domestic T is 11x the amount of inbound T
o Western Europe and North America dominate global T focus which increased in the
1970s and resulted in a price drop due to increase in competition
o From 80s to 2000’s global T grew at 4% pa
o Globalisation has seen an increase in actual destinations in the developed and
developing worlds
o Recently highest growth occurred in Asia Pacific region reflecting rising incomes in
industrialised and newly industrialised countries
o Since turn of 21st Century, increase in T from developing worlds due to a rising
middle class income e.g. China, India, Thailand
o Based on the physical environment of location – increase in tech. allowed access to
more locations
Factors Explaining the Nature, Spatial Patterns and Future Directions of Tourism
Biophysical: climate, soils, topography, site
o Bio&Built env can be integral component of T industry as they can offer scenic sites,
wonders, climates, art/culture, sport/rec which attract T
o Thus, T based on spatial distribution of these attractions. Environment needs to
provide experiences not attainable at home
o Environmental conditions can place constraints on the types of T as places with
suitable climates, floral and faunal attributes are more desirable - INTRINSIC
o Climate based on location factors – most outdoor activities dependant on favourable
conditions. Climate and hence location determine length and profitability of holiday
season e.g. Thredbo
Technological: transportation, information, biotechnology
o Biggest role = increases access
o Internet greatly increased amount of info available to T – people can view hotel
facilities, make a reservation and access websites of attractions before visiting
o Also changing way people record experiences – cameras record details and store
conveniently making it easy for people to gain interest and see attractions however
people can also virtually live the experience without having to physically travel there
o New developments in air, road and sea transport = greater frequency and volume of
T
o More competition results in cheaper flights  Boeing 747 (70s) reduce cost +
increase passenger volume, now Airbus 380 can hold 550 passengers
o Lower airfares expand pool of people that can travel
Sociocultural: tradition, changing lifestyles, labour participation rates
Social Influences
o Leisure and T are important factors in quality of life – individuals want to enhance
o Demographic components e.g. age, income, family structure, status influence the
destination
o Aging population meaning more people with capacity to travel each year
o USA aging pop spend $157 billion on trips every year – ranking travel as #1 leisure
activity
o DINKS – less restraints and more free time
o Exchange programs for young people
o Increase of women in workforce contributes to T as it creates double income
Economic: competitive advantage, consumer demand, mobility of labour and capital
o Biggest form of foreign exchange – effects inbound/outbound T – increase $ good
for overseas however bad for domestic
o High income economies usually have population which travel a lot
o Contributes to national exports – exports from international T rose 4% in 2015,
totalling $1232bn
o T vulnerable to economic downturns due to dependence on discretionary incomes
GFC 2008 – 2009
Collapse of Lehman Brothers led to global share market plunge as financial
institutions collapsed  increase in unemployment and loss of consumers
due to decline in discretionary income = T
o Increase in middle class as an emerging economy alters magnitude of T
o Developing countries – T is a way to accelerate economic development
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Relationship Between Consumption and Production
T generating areas – homes of T where demand is generated for T inflow
T destination areas – attract T by offering what isn’t available at home
Tangible (souvenirs) or Intangible (thrill of white water rafting)
Production occurs at point of consumption – in situ
Productive activity also encourages development of infrastructure and productivity
of activity
Organisational: ownership, decision making and control
o Structure of businesses within T industry
o Now, globalised as tech advances create ease of international communication
making travel easier, safe and more comfortable
o Vertical Integration: expansion by taking over other levels within production chain
(less common now, maximises profit)
o Horizontal Integration: expansion by taking over other businesses on the same level
(more common)
o Diversification: expanding in other industries (e.g. Mitsubishi cars, air con,
electronics) – when companies buy another company like themselves (horizontal) or
buy a company that they either supply or are supplied by (vertical)
Organisational Developments
o 2 sources: govt or private sector
o The govt: realising T is a private sector activity that effects economies, the govt plays
a role in T by providing funding for infrastructure, visa regulation – sometimes very
involved (Olympics)
o Gov. 2020 T implementation program – aims to encourage T, limit taxes
o Private sector – private enterprises dictate the type of accommodation, transport,
amenities and attractions available, making the industry competitive
Political: quotas, tariffs, compacts, agreements
o Private sector activity that requires government direction – grants + expenditure,
taxes, visas all influence the level and direction of T
o T Promotion (Indirect Support)  contribution of govt is promotion of destinations,
T Aus. Is a govt agency who promotes T domestically + internationally indirectly
helping T businesses
o Infrastructure/target support (Direct Support)  Sydney’s second airport, $1.8 mil
support for Blue Mountains T
o Income from T can broadly improve domestic infrastructure and improve economies
o Countries with weak political systems can deter T from country e.g. Turkey derived
from Syria cross border political unrest
Ecological: sustainability and resource use
2 main issues – environmental degradation and undesirable social impact
o T and T activities predominately located in or near important parts of biophysical
env. Thus vulnerable to human stress
o Without proper management, destruction of natural env occurs e.g. damage to veg
or removal of natural habitats
o Impacts of T on env = trampling, boats
o QANTAS offering T to pay an extra $2 to fly carbon neutral, use money to buy tree to
absorb carbon
Ecotourism
o 1.6 bil. Predicted eco inspired trips to be taken in 2020 (UN WTO)
o increase in awareness of intrinsic value of environment
o Scenic World Blue Mountains – scenic railway and bush walks
The Environmental, Social and Economic Impacts of Tourism
Social Impacts
o Social contact between T and locals can be mutually beneficial
o T create revenue for the area and locals get to show case their own culture
o Increase numbers of T can also lead to hostility from host nation
o May lead to misunderstanding through hostility and social tensions as residents
lifestyles are affected by demand of T
o Least desirable impacts include prostitution, crime and gambling
Positive
Provides employment in regional
Economic sectors (e.g. Alice Springs) meaning
Impacts
less government support however
may be seasonal
Injects money into local economy as T
spend money
May reduce overseas debts however
may borrow money for infrastructure
(e.g. Commonwealth Games Delhi)
T accounts for 10% of global
employment
e.g. Hunter Valley 2.2 million
domestic T pa
Total value 2013 - $1.5 billion
e.g. Parkes Elvis Music Festival
350km west of Sydney – 500 people
for one weekend
Turnover for businesses in town
increase by 20-50% café or 50-100%
club
Negative Infrastructure Costs e.g. airports
Economic reduces revenue to be spent on areas
Impacts
such as edu or health
Economic Leakages – T industries in
develop eco. Are owned by nations
outside of country. As a result, much
of the money T spend overseas leaks
out of their economy
Over reliance on T – heavily affected
by eco downturn
Positive
Ecotourism – provides education to
Env
visitors on the environmental value of
Impacts
location
In 2004, 29% of Tonga’s revenue
from labour goes to other nations
65% of Liberia’s T operations go to
USA
e.g. Hawaii, following GFC
unemployment rose by 6%
e.g. GBR
- Argument against dredging/oil
drilling is the impact on T which has
value of $5 bil per year
Negative
Env
Impacts
Positive
Cultural
Impacts
Negative
Cultural
Impacts
Pollution + Waste
Pollution from transport
Degradation of environment due to
developments e.g. land clearing,
demolition of sand dunes
Wildlife interactions – disrupts
breeding patterns of fauna and natural
processes e.g. feeding where animals
become dependent on people for food
Use of resources e.g. water, gas,
electricity which come from local
environment result in resource
depletion
Valuing culture – more incentives to
retain it
Protection of cultural buildings and
preservation of built environment
e.g. sewerage in Bali at overcapacity
w/ T presence
e.g. aircraft pollution – by 2020
projected to be 70% higher than in
2005
80% of greenhouse gas production
from air transport however only
accounts for 20% of travel
Commodification of Culture which
cheapens experience
Impacts on Locals as prices of g+s
increase
T increase prices of g+s e.g. Belize
8% increase in basic items
Venice Italy – 1950s pop. Over 170
000 now it is 70 000.
40% of international visitors to Uluru
nominate a desire to experience
Aboriginal culture as their primary
motivation to visit
Future Direction of Tourism
o T is largest and fastest growing industry globally
o It will continue to grow esp in developing countries as it is a source of income, tax
and revenue
o The future pace will depend on:
 Affordability – aligned with current levels of eco growth, Australasia seen as
future growth area
 Accessibility – transport improvements and lower costs
 Accommodation – customised travel will provide needs and experiences for
all demographics of T
 Attractions – natural environments preservation, construction of new
developments and improving technology will allow developers to respond to
changes in markets
 Fewer barriers to international travel
 Planning which meets sustainability purposes to set destinations apart
Local Case Study – Perisher Blue
o Big business – $3 bil eco activity, 17 000 full time jobs, 3.1 mil visitors (2005). Skiing
began in 1861.
Nature of the Economic Enterprise
o Perisher Blue Pty Ltd – owner/operator of Perisher Blue Ski Resort
o Recreational and hospitality enterprise located inside Kosciusko National Park
(largest in SH)
o 1245 ha of skiable terrain, 7 major peaks (highest: 2045), 50 Ski Lifts with capacity of
52 903 people/hour
o Formed in March 1995 after merging with Mt Blue Cow Ski Resort and facilities at
Perisher Valley, Smiggen Holes and Guthega
o Business focuses on snow sports, lodges and hospitality
o Controlled by Consolidated Press Holdings with Transfield Holdings having a 27%
share in the company. It has leases over buildings and ski lifts until 2030
o Activities such as snow sports, night skiing, lessons, scenic tours
o Accommodation at Smiggins, Guthega, Perisher Valley Hotel
o Summer activities e.g. biking, hiking, bush walking
o Services like bars, restaurants, fireworks, night life
Locational Factors
o Kosciuszko National Park in Snowy Mountains of SE NSW
o Jindabyne closest town (30km away) – accommodates staff and visitors
o Sydney is 5.5 hour drive and Canberra is 2.5 hours  2 main markets for Perisher
o 70% of market below 35 – families, young professionals with high disposable income
o Cold destination T activity therefore restricted to certain elevations + latitudes
High Seasonal Variability of the enterprise
o Visitation greater in Winter
o High variability in numbers with peaks and troughs making it difficult industry to
manage
o PB operates on 17 week winter season but really only 12-14 weeks
o Therefore, small window of opportunity to operate business
o Staff increase from 140 to 1200
Spatial Patterns and Dimensions
o Elevation – 1608m above sea level, highest point is 2034m
o Latitude – misses out on sub polar climate due to geographical position, lies 36S
148E e.g. 2006 NZ best season but missed Australia
o Climate – 2000mm total annual precipitation, 1600m snow cover for 4 months
o Temperature – 5.7 to 18.2 Summer, -5 to 2.4 Winter
Accessibility
o Perisher remote – developed to be accessible by T and staff via transport
infrastructure
o Snowy Mountains Access Scheme created towns and employment
o Challenges with accessibility revolve around distance from major cities where
clients must travel as market is primarily metropolitan based
o Meaning millions spent on advertising
o Improvements in infrastructure – Sydney to Canberra duel carriage motorway
decreased travel time and better accessibility, also Ski Tube opening
Ecological Dimensions including environmental constraints, climate, and human impacts
on the environment such as pollution and ecological sustainability
Ecological Sustainability: Capacity of the biosphere to meet the needs of the present
generation without hindering future generations from being able to meet their needs
Ecological Dimensions
o PB depends on specific climatic and topographic factors (e.g. seasonal availability of
snow) therefore resulted with PB being located within fragile alpine environment
o Established in 1944 Kosciuszko covers 673542ha and is a unique Australia Es and is
recognised as a Biosphere Reserve by UNESCO
Ecological Sensitivity of the Site and Management Responses
o Environmental Impacts associated with snow based T:
 Construction of resort – related facilities (accommodation, lifts, maintenance
facilities, access roads)
 Clearing and preparation of ski runs
 Effluent and solid waste disposal
 Compaction by snow groomers and snow riders – impacts on vegetation
(alpine grasses)
o PB management, NSW National Parks and Wildlife Service have set up policies and
practices to protect the areas endangered flora and fauna
Threatened Animal Species
o Pygmy Possum, Broad Toothed Rat and the Alpine Water Skink are endemic species
to the area
o Pygmy Possum’s are the only mammal which live above the snow line, habitat is in
the bolder fields in the plump pine and they eat bogong moths. Thought to be
extinct until 1 was found in late 1960s and since then the NPWS put in place
program to monitor and protect species mainly in Blue Cow. Access to Possums
habitat prohibited by recreational snow sports people and love tunnels created to
allow free movement to possums
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Climax Vegetation Communities
Subalpine plant communities contain highly specialised alpine species
178 plant species are found in the area – 11 are deemed threatened like anemone
buttercup
oldest tree is 2500 years old. Tree communities have short windows for growth and
take 300 – 700 years to reach full maturity
Valley Bog Complex NP largest example of unique community – protected by
temporary signage and rope, also protected by snow when T are there
Water Supply
o Receives 2000mm of precipitation per year but has water shortage problem
o Due to its small catchment areas and most water is unusable frozen ice. Domestic
uses and snowmaking requires 100’s of megalitres to run and work
o Snow Hydro Scheme is used where PB plugs into an aqueduct and borrows water
from the scheme – however dependent on the plug having enough water
o Other strategies also include:
 Reducing water use within hotels and staff accommodation – 98% of shower
heads converted with low flow fittings, including 100% of staff accom. Mens
urinals use a waterless system saving 4L per day
 Recycling bins provided; broad waste management scale including paper,
glass, plastic all recycled at PB
 Annual Clean up Day
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Sewage
Sewage ranges from minimal in Summer to peak maximum in Winter
When treatment plant operating at max capacity, it is buried in snow, high diurnal
flow from day trippers in toilets as they only urinate
Perisher Range Master Plan has a $50 million upgrade which allows treated water to
be used again and protects pipes to reduce leakages into environment
Measures are vital in running of resort as temporary closures can lead to millions of
$$ lost revenue
Pollution from Cars
o Cars have big impact on PB due to exhaust from day trippers and large buses
o Polyaromatic Hydrocarbons (PAHS) which ‘spill’ or ‘leak’ from cars into carpark and
infiltrate the environment via runoff
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Climate Constraints
Inevitable threat of climate change will take its toll on the destination meaning
retreating snowline and shorter seasons
By 2020, the nations average temperatures are projected to be b/w 0.2 – 0.4
degrees higher than 1990; expected to be 1 to 6 degrees higher in 2070
A rise of just 0.3 degrees will mean an 18% decrease in snow cover, 1.3 degrees will
see 66% reduction
PB adopting precautionary principle regarding climate change which involves
postponing environmental degradation
Onus on current generation to ensure responsible management and protection of
environment for future generations
Measures include energy saving chairlifts, efficiency in machinery, green energy,
water efficiency and recycling, revegetation programs (e.g. Blue Cow 2003 bushfire,
over 7000 native shrubs replanted)
Establishing the Ecological Dimensions of PB
o When est. ecological dimensions the following must be considered:
 Existence of PB depends on specific topographical and climatic features of
elevation and spread of snow
 Resort DOES impact on surrounding biophysical environment
 NPWS do have conservation and sustainability as the cornerstone of
management strategies
 Balancing commercial interest of PB and ecological integrity of area is central
to process of env. Management
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No further spatial expansion can occur. All redevelopment will occur within
existing site boundaries
Ultimate future of resort depends on something outside its control: climate
change
Internal and External Linkages and Flows of People, Goods, Services and Ideas
Market Linkages
o PB is a market leader at local and national scale, largest ski resort in SH (visitor
numbers, area, revenue)
o Twice visitation of Thredbo and more business than all Victorian resorts combined
(lowest elevation 200m higher than all vic resorts)
o Compares to North American resorts in regards to hectares of snow and ski lift
numbers
o PB is significant employer and major player in regional economy, 50% of operating
costs are spent on labour, with millions of wages paid in 4 months to young workers
who don’t save and inject it into regional economy (Jindabyne)
Flows of People, Goods and Services in Perisher
o T in the form of day trippers, long stays and holiday makers
o Lodge owners, manager and workers such as instructors
o Food and beverage provided by wholesale from urban centres
o Retail – souvenirs, ski hire, clothing
o Services like amenities from Aus Post, Energy Au
Ideas and Technological Inputs
o Snow groomers – 350 introduced in 2005, $400 000 vehicles
o Snowmakers
o Lifts – 8 person chair, T bar, supplied by Doppelmayer Group
o Ski/board hire
o Consumer transport – ski tube
o IT – snowcams, websites, booking, weather and commercial information
Flow of Capital
o Wages - $13.5 million per season
o Snowmakers $1000/hour, $8 mil total
o Backed by the packer family companies (consolidated press holdings)
Effects of Global Changes in the Economic Activity on the Enterprise
Climate Change
o Could result in total disappearance of snow from lower elevations and could see
increase in elevations of snowlines
o Global issue meaning little PB can do
o Alpine ES is so sensitive due to limited area and altitudinal extent – highly specialised
therefore vulnerable
o Reduced snow pack could interfere with ecological processes due to decreased
protection of human and physical impacts on ES
o This reduction will impact upon distribution of species, population and communities
o Burramys, broad toothed rats are examples of fauna that would be affected
o An adaption to the threat of alpine ES is looking towards making alpine areas an all
year round destination
o Perisher Range Master Plan responded to this by changing the carpark to a village
complex which will hopefully facilitate year round usage of passive and active
activities as visitors have more choice
o Perisher has comparative advantage in terms of CC due to their snowmaking
facilities which is available due to the aqueduct – Snowy Mountains water supply
gives advantage
Increasing Global Competition
o Market for cold destination T is highly volatile – dominated by young profressionals
with disposable incomes who lack destination loyalty, and expect snowmaking and
slope grooming
o Resorts have to differentiate themselves according to their target market, and need
to find niches e.g. night skiing, half pipes, black runs, beginner runs
o PB competes with other cold Aus and overseas resorts as it is easy to travel overseas
for cold climate T (Japan) or go to NH for warm climate T in Aus. Winter bc cheaper
o PB responded to this by trying to follow Thredbo’s lead in becoming Aus. Leading all
seasons resort
o Thredbo takes 300 000 visitors in summer – with activities including waling, gold,
BMX giving Thredbo an advantage
o Main target market is baby boomers coming into retirement
o Globalisation has seen the emergence of international strategic alliances with trends
that link ski resorts all over the world whereby loyalty will be rewarded for visiting
allied resorts in Australian, Nth America and Europe