Is Tourism good for
Development?
Why have LEDC’s become
popular?
How has this become possible?
Leakage
• In most all-inclusive package tours, about
80% of travellers' expenditures go to the
airlines, hotels and other international
companies, and not to local businesses or
workers.
• Estimates for LEDW - 80% in the
Caribbean, 70% in Thailand & 40% in
India.
Leakage
Import leakage
• LEDW - food and drinks often imported - local
products often not up to the hotel's (i.e. tourist's)
standards or the country simply doesn't have a
supplying industry eg Scotch whiskey.
• Average import-related leakage - 40-50% of
gross tourism earnings for small economies and
between 10% and 20% for most advanced and
diversified economies.
Export leakage
• TNC's significant in export leakage.
• Have necessary capital to invest in the construction of
tourism infrastructure and facilities.
"all-inclusive"
• All-inclusive - largest amount of revenue but smaller impact on
economy per dollar of revenue than other accommodation
types.
• All-inclusives also import more and employ fewer people per
dollar of revenue than other hotels.
• Non-river cruises carried some 8.7 million international
passengers in 1999.
• Guests encouraged to spend most of their time and money on
board, and opportunities to spend in some ports are closely
managed and restricted.
• Smaller trickle-down effect on local economies.
Dependence economies
• Diversification in an economy is a sign of health.
• Gambia - 30% of the workforce depends directly or indirectly
on tourism.
• In small island developing states, percentages can range from
83% in the Maldives to 21% in the Seychelles and 34% in
Jamaica.
• Over-reliance on tourism carries risks to tourism-dependent
economies. Economic recession, the impacts of natural
disasters such as tropical storms and changing tourism
patterns can all have a devastating effect.
Foreign exchange earnings
• An important indicator of the role of international tourism is its
generation of foreign exchange earnings.
• Tourism can generate income for infrastructural
improvements such as better water and sewage systems,
roads, electricity, telephone and public transport networks
• Tourism is one of the top five export categories for as many as
83% of countries and is a main source of foreign exchange
earnings for at least 38% of countries.
Contribution to government revenues
• Direct contributions - taxes on incomes from
tourism employment & businesses and by
direct levies on tourists such as departure
taxes.
• Indirect contributions come from taxes and
duties levied on goods and services supplied to
tourists.
• The WTO estimate - worldwide contribution
was over US$ 800 billion in 1998 - a figure it
expects to double by 2010.
Employment generation
• The hotel accommodation sector alone provided
around 11.3 million jobs worldwide in 1995.
• Tourism can generate jobs directly through hotels,
restaurants, nightclubs, taxis, and souvenir sales,
and indirectly through the supply of goods and
services needed by tourism-related businesses.
• Tourism supports some 7% of the world's workers.
Antigua: a Caribbean case study
A sustainable future from tourism?
Make note of the following:
 Background of an LEDC.
 Facts & figures about tourism.
 How does the organisation of tourism (typical of an
LEDC) result in costs outweighing benefits?
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Economic (leakage, cruises, all inclusive, employment).
Social (cultural dilution, demonstration effect).
Environmental.
Political.