THE STRUCTRE AND ROLE OF THE PRIVATE SECTOR IN TOURISM

Introduction
Tourism often plays an important part in a nation’s economy by providing opportunities for
regional employment, contributing to the balance of payments and stimulating economic growth.
Countries that experience an influx of large numbers of tourists, however, also suffer the
environmental and social consequences of mass tourism, unless care is taken to plan for and
control the flow of tourists.
Any economy that has become overly dependent on tourism can be massively weakened by a
single political or natural disaster – as the chaos created in Bali following the terrorist strike there
has shown.
For both economic and social reasons, therefore, governments cannot let market forces rule –
they must take a direct interest in the ways tourism affects their country.
The more dependent a nation becomes on tourism, whether domestic, inbound or outbound,
the more likely it is that the government will intervene in the industry’s activities.

THE NATURE OF GOVERNMENT INVOLVEMENT

A country’s system of government will be reflected in the mode and extent of public
intervention.
In summary, a national government’s role in tourism can be manifested in the following ways:
 In the planning and facilitating of tourism, including the provision of financial and other
aid
 In the supervision and control of the component sectors of the tourism industry
 In direct ownership and operation of components of the industry
 In the promotion of the nation and its tourist products to home and overseas markets
 In supporting key tourism interests in a time of financial crisis.

Planning and facilitating tourism

Any country in which tourism plays a prominent role in national income and employment can
expect its government to devise policies and plans for the development of tourism.
This include generating guidelines and objectives for the growth and management of tourism,
both in the short and long term, and devising strategies designed to achieve those objectives.
Tourism planning calls for research – first, to assess the level of demand or potential
demand to a particular region, second, to estimate the resources required in order to cater
for that demand and, finally, to determine how those resources should best be distributed.
As we have seen, demand is unlikely to be generated to any extent until an adequate
infrastructure and superstructure are in place, but it is not sufficient simply to provide these
amenities. Tourists also need staff to service the facilities – hotel workers, travel agents, guides –
trained to an acceptable level of performance. Planning therefore includes ensuring the
availability of a pool of labour, as well as the provision of apprenticeship schemes or training
through hotel, catering and tourism schools and colleges to provide the skills and knowledge the
industry requires.
In some cases, providing the facilities that tourists want can actually have a negative
impact on tourism to the region.
e.g. while the building of airports on some of the smaller islands in Greece opened up these
islands to larger flows of tourists, it made the islands less attractive to the upmarket high-
spending tourists, who preferred the relative isolation that existed when accessibility was limited
to ferry operations.

Government control over entry

Accessibility is a key factor in the development of tourism. It relies on both adequate transport
and the absence of any political barriers to travel. If visas are required for entry to a country, this
will discourage incoming tourism.
At the beginning of the 1990s, the UK imposed a visa requirement on citizens of Turkey seeking
to enter Britain. The Turkish retaliated by imposing a visa requirement on British visitors to their
country. The flow of tourists was almost entirely one way, however, so the Turkish emerged as
the clear losers, the visa requirement dissuading tourists from visiting their country.
The cost of obtaining visas as well as the complexity of applications can encourage travelers
to choose to travel to countries that do not require visas.

Taxation policy
Government policies on taxation can impact on tourism, whether the taxes are applied directly to
tourists (such as an entry or exit tax), the industry (such as on hotel accommodation) or indirectly
(such as VAT or sales taxes, which can discourage shopping and benefit countries with lower
taxes). It may even encourage day trips across borders to shop in areas where taxes are lower.
Transportation taxes, such as those introduced in 1997 both into and out of the state of Florida,
increasing the cost of an airline journey for a family of four travelling to the Walt Disney World
Resort by some £70 – a substantial percentage of their total flight costs – can have a significant
impact on demand for a destination. Even within the European Union, variations in taxation can
impact on tourism flows.
Facilitating training
Another important factor determining tourism flow is the attitude of nationals in the host country
towards visitors in general and those from specific countries in particular.
Governments in countries heavily dependent on tourism must mould the social attitudes of their
populations, as well as ensuring that those coming into contact with tourists have the necessary
skills to deal with them.
Customs officers, immigration officials, shopkeepers, hotel staff, bus and taxi drivers must not
only be competent at their jobs but also trained to be polite and friendly as first impressions are
important for the long-term image of a
country.
The USA is one of several countries that have found it necessary to mount campaigns to improve
the politeness and friendliness of officials dealing with incoming visitors, while some Caribbean
governments have run training programmes to reduce xenophobia among the local populations
and make residents aware that their economy depends on incoming tourism. In Britain, the
government has supported industry moves to improve social and personal skills in handling
foreign tourists, with training programmes such as Welcome Host, International Welcome Host
and Welcome Management.
Encouragement has also been given to learning foreign languages – a major weakness among
personnel in the UK’s tourism industry.

The responsibilities of central and local government

The tourism industry is made up different sectors and departments that requires adequate
coordination between these various departments to achieve effectiveness of the overall planning
of tourism initiatives within the country.
The responsibilities of central and local governments also differ on issues affecting tourism.
Local government may be responsible for planning, policy and infrastructure and, as a
consequence, have to address a number of issues that directly affect visiting tourists, including
the provision of car and coach parking, litter control, maintenance of footpaths and promenades,
public parks and gardens and, where appropriate, beach management and monitoring of sea
water for bathing.
These responsibilities are, to some extent, split between city and regional councils and
conflicting views may surface between local authorities, as well as between local and central
government.
Local authorities are greatly influenced by the views of their local taxpayers, who are often
unsympathetic to the expansion of tourism in their area, particularly if it is already popular with
tourists.
In countries where tourism is not a statutory obligation of local authorities (and Britain is such an
example), they may not legally have to include tourism in their plans or provide funding for
resources for tourists.

Financial aid for tourism

Governments contribute to the growth of tourism by financing the development of new
projects.
The success of these ventures demonstrates the effectiveness of large-scale private–public-sector
cooperation in building new tourism resorts from scratch, with the public sector providing the
huge funds necessary to acquire land and build the necessary infrastructure.
On a smaller scale, governments may also provide assistance to the private sector in the
form of financial aid, offering loans at preferential rates of interest or outright grants for
schemes that are in keeping with government policy.
One example of the way in which such schemes operate in developing countries is for loans to be
made on which interest only is paid during the first few years, with repayment of capital
postponed until the later years of the project, by which time it should have become self-
financing.
Other forms of government aid include subsidies such as tax rebates or tax relief on
operating expenses.
Government support is also necessary at a time of catastrophe.

Social tourism
One little-known aspect of public-sector support for tourism is to be found in the encouragement
offered by way of social tourism.
Definition
The concept of social tourism has been used in several contexts.
In some cases, this term is used to propose the idea that the opportunity to take a holiday is a
human right and there should be provision by the welfare state for those unable to afford to take
a holiday.
From a supply side, the term is often used when considering circumstances where governments
encourage tourism to specific areas in order to encourage economic development.
Minnaert et al.7 suggest that ‘social tourism is about encouraging those who can benefit from
tourism to do so.
This may represent a wide variety of groups, such as the host population of an exotic destination,
tourists on a cultural holiday, persons with disabilities, their carers, the socially excluded and
other disadvantaged groups.’
Economic support to encourage social tourism may be offered in the form of finance (grants,
low-interest loans and the like) or direct support, such as the provision of free coach trips or
holiday accommodation. One might use this generic term to also include the public funding of
health tourism, which has been the practice of some countries’ governments to subsidize as part
of the general public health and well-being of its populations.
Supervision and control of tourism
The state plays an important part in controlling and supervising tourism, as well as helping to
facilitate it, where it is deemed necessary. It will, for example, intervene to restrain undesirable
growth or unfair competition or, alternatively, help to generate demand by improving
infrastructure or encouraging the building of hotels (as the Development of Tourism Act did in
Britain in 1969). Governments also play a role in maintaining quality standards and protecting all
consumers (in this case, tourists) from business malpractice or failure.
Local government may introduce visitor management policies (details of which were provided in
Chapter 16) to control both the numbers visiting destinations and their actions and behaviour
there. Visitor management may be enforced by local government, but it is often implemented by
both government initiatives and the activities of private sector tourism businesses.
A government can act to restrain tourism in a number of ways, whether through central directives
or local authority control. Refusal of planning permission is an obvious example exercising
control over the development of tourism.
Sometimes governments exercise control over tourism flows for economic reasons. Governments
may attempt to protect their balance of payments by imposing currency restrictions or banning
the export of foreign currency in an attempt to reduce the numbers of its citizens travelling
abroad.
The commonest form of government supervision of the tourism industry in all countries is to be
found in the hotel sector. Apart from safety and hygiene requirements, many governments also
require hotels to be compulsorily registered and graded, display prices and the buildings are
subject to regular inspection. Camping and caravan sites may also be subject to inspection to
ensure consistent standards and acceptable operating conditions.
Finally, the government’s concern with quality will lead to setting up systems of inspection,
where safety is concerned, or training programmes and other means to enhance
quality where it is seen as sub-standard. Again, Britain has recently promoted schemes
leading to publicly recognized standards of quality, including the National Quality
Assurance Schemes (NQAS) and Visitor Attraction Quality Assurance Scheme (VAQAS).
The British government has recognized that tourism research statistics are inadequate and is
encouraging improvements, notably through the collection and evaluation of data by the regional
development agencies (RDAs). Local authorities are encouraged to support the collection of
tourism data, but, again, without legal enforcement.

THE ORGANIZATION OF PUBLIC-SECTOR TOURISM

Having looked at the various ways in which public-sector bodies concern themselves with
tourism, we can now usefully summarize their main activities below.
For the most part, government policies and objectives for tourism are defined and implemented
through national tourist boards.
Also, in many cases other bodies directly concerned with recreation or environmental planning
are involved in the development of tourism.
These boards are normally funded by government grants and their functional responsibilities
include all or most of the following:
1. Planning and control functions
a. Product research and planning for tourism plant and facilities
b. Protection or restoration of tourism assets
c. Human resources planning and training
d. Licensing and supervision of sectors of the industry
 e. Implementation of pricing or other regulations affecting tourism.
2. Marketing functions
a. Representing the nation as a tourist destination
b. Undertaking market research, forecasting trends and collecting and publishing
relevant statistics
c. Producing and distributing tourism literature
d. Providing and staffing tourist information centers
e. Advertising, sales promotion and public relations activities directed at home and
overseas markets.
3. Financial functions
a. Advising industry on capital investment and development
b. Directing, approving and controlling programmes of government aid for tourism
projects.

4. Coordinating functions
a. Linking with trade and professional bodies, government and regional or local
tourist organizations
b. Undertaking coordinated marketing activities with private tourist enterprises
c. Organizing workshops or similar opportunities for buyers and sellers of travel and
tourism to meet and do business.
National tourist boards establish offices overseas in those countries from which they can attract
the most tourists, while their head office in the home country will be organized along functional
lines.
In some countries, some of their activities are delegated to regional tourist offices, with the
national board coordinating or overseeing their implementation.

UK government’s involvement at local level

Up until 20 years ago, fewer than half of the local authorities in England included any strategy
relating to tourism in their planning, although Government Circular 13/79 had urged them
particularly to consider providing for tourism in local structure plans and the then ETB had
offered guidelines for local authorities to follow when drawing up such plans. The following key
points were emphasized:
 Assess the number and distribution of tourists in the area
 Estimate future changes in tourism flows and implications of this for land use
 Identify growth opportunities
 Assess the impact of tourism on employment and income in the area
 Assess the tourists’ effect on traffic flows
 Assess the tourists’ demand for leisure and recreation
 Identify the need for conservation and protection
 Evaluate the contribution tourism could make to development, especially in the use of
derelict land and obsolete buildings.
The principal responsibilities of county and district authorities that bear on tourism are
as follows:
• Provision of leisure facilities for tourists (such as conference centres) and residents
(theatres, parks, sports centres, museums and so on)
• Planning (under town and country planning policies) – note that district councils produce
local plans to fit the broad strategy of the county councils structure plans and those plans
are certified by the county councils
• Powers to control development and land use
• Provision of visitor services (usually in conjunction with tourist bodies)
• Parking for coaches and cars
• Provision of caravan sites (with licensing and management the responsibility of district
councils)
• Production of statistics on tourism, for use by the regional tourist boards
• Marketing the area
• Upkeep of historic buildings
• Public health, including food hygiene and safety issues, as well as litter disposal and the
provision of public toilet facilities.
Local authorities may also own and operate local airports, although in many cases they are
now in private hands. The provision of visitor services will normally include helping to
fund and manage tourist information centres, in cooperation with the regional tourist
boards, which set and monitor standards. Local authorities will also fund tourist information
points, information boards found at lay-bys, car parks and city centres.
Local authorities that have set out actively to encourage tourism have a number of
objectives, some of which may conflict and each of which will compete for scarce
resources. Local tourist officers will need to identify the resources they require to achieve
their stated objectives and determine their priorities.
Typical objectives might include:
• Increasing the numbers of visitors
• Extending their stay
• Increasing their spend
• Increasing and upgrading local attractions
• Creating or improving the image of the area as a tourist destination
• Stimulating private-sector involvement in tourism.
Local tourist officers act as catalysts between the public and private sectors and voluntary aided
bodies. As a focus for tourism in the area or resort, they become a point of reference,
advising on development and grant-aided opportunities. Officers will help the local
authority to determine and establish the necessary infrastructure that will allow tourism to
develop, and carry out research and planning activities themselves. In some areas, they may
become involved in the provision and training of tourist guides. In addition, they will
undertake a range of promotional and publicity functions, including the preparation of
publications such as guides to the district, accommodation guides, information on current
events and entertainment and specialist brochures listing, for example, local walks, shopping,
restaurants and pubs. The cost of most of these publications will be met in part by contributions
from the private sector, either through advertising or, as in the case of the accommodation
brochures, through a charge for being listed. Many resorts also now produce a
trade manual, aimed at the travel trade and giving information on trade prices, conference
facilities and coach parking.
Tourist officers may also organize familiarization trips for the travel trade and the media
and, if the resort shows sufficient potential, may invite representatives of the overseas trade
and media. They frequently play a part in setting up and operating the local tourist information
centre (TIC), which may include a local accommodation-booking service. Some go
as far as to actively package holidays for inbound visitors, including activity weekends or
special interest short breaks. It should be noted that all of these functions are frequently
the responsibility of a very small team, on occasion no greater than a single tourist officer
and a secretary.
Unlike the regional tourist boards, where responsibilities are predominantly promotional,
tourism planning and sustainable development form key elements of a local authority’s
functions. They may, consequently, be as concerned to reduce or stabilize tourism as to
develop it, particularly when, as is so often the case in the popular tourist resorts, local residents
are opposed to any increase in the numbers of tourists attracted. For this reason, in
providing for leisure, the authorities must be as sensitive to local residents’ needs as they
are to those of incoming tourists. They must convince the residents of the merits of public
investment in tourist projects.

Tourist information centres (TICs)

TICs play a particularly important role in disseminating information about tourism, in the
UK as elsewhere.

Information technology initiatives in the public sector

One means of providing tourist information cheaply is to have tourist information points (TIPs) –
unattended stands providing information about local facilities. In many cases these will be
located in TICs, but, in some cases, they are placed in popular tourist spots and can include
sophisticated booking systems for local hotels, either using telephone connections or computer
links.
The computer-linked accommodation reservation system was just the first step into IT
taken by the public sector. The British boards have moved steadily towards developing
and expanding their websites and now provide the public with a comprehensive package
of information and booking services.
The website is of particular value to SMEs, enabling them to reach their
customers more effectively online. It allows companies to enter up-to-date information
about their organizations on to the central database and that is used to provide website
information for linked websites such as www.enjoyengland.com and www.visitbritain.com.
Products will be accepted on to the site, subject to their being quality assessed and graded.
Some local authorities are involved with plans to allocate rooms within their districts to tour
operators for package tour arrangements. Such a centrally controlled allocation of hotel rooms
would enable hoteliers to reduce their individual commitments to tour operators and therefore
minimize wastage in the reservations process.
Plans are also under way for call centres to be set up within the TICs, which will allow
the public to make bookings direct via the new website.
One other feature that deserves mention here is the emergence of electronic marketing
units (EMUs) at TICs. These are databases accessible to passers-by outside the TICs, so their
use is not limited to the opening times of the TICs themselves.
The TICs provides the basis for interactive communication between tourists and tourist facilities,
which would allow visitors to make reservations for hotels, theatres and a host of other
amenities.

National heritage bodies

Heritage plays a particularly important role in tourism – monuments, historic homes and
cathedrals provide a wide variety of any area’s tourist attractions.
While many of these resources remain in private hands or are the responsibility of bodies such as
the Church Commissioners, a number of quasi-public or voluntary organizations exist to protect
and enhance these heritage sites. These bodies, therefore, fulfil an important role in the tourism
industry. Even when heritage buildings are not open to the public, they still form an attractive
backdrop to any townscape for passing tourists.
Internationally renowned UNESCO World Heritage sites draw people from all over the
world and are carefully protected. UNESCO works to protect sites of international importance,
encouraging management plans to be developed to ensure the protection and conservation of its
recognized sites (more than 850 were recognized in 2008). It also provides around US$4 million
annually in funding support.
Public private-sector cooperation
Due to the complexity of tourism, there is frequently a lack of coordinated tourism policy at
government level, while, at the same time, financial constraints are restricting public expenditure
on tourism.
It is assumed that the public sector can best assist a country’s prospects for tourism by reducing
its role in development and promotion and entering into partnership with the private sector.
Regions, sometimes transnational, are also opting for a collaborative approach.
Such moves towards a more commercial approach among the public bodies has paralleled
public–private ventures. At local level, the formation of tourism marketing organizations, made
up of representatives from both the public- and private-sector interests, is becoming a popular
alternative to traditional public-sector tourism organizations.

Town twinning and tourism

The concept of town twinning emerged in the aftermath of World War II, as a means of
overcoming hostilities between the warring nations and forging greater understanding
between communities in different countries. Usually, the selection of a twin town is based
on some common characteristics, such as population size, geographical features or commercial
similarities. Local authorities and chambers of commerce arrange for the exchange
of visits by residents of the twinned towns.
Although conceived as a gesture of friendship and goodwill, the outcome has commercial
implications for tourism, as visitor flows increase between the twinned towns.

The role of the European Union (EU)

The principal stated objectives of the EU as regards tourism include:
 The facilitation of tourist movements, through abolition of frontier controls, deregulation
of transport, ease in transfer of foreign currencies, reciprocal health coverage and better
information and protection for tourists themselves
 More effective promotion, through state aid and other means
 Help in distributing the flow of tourists better, both geographically and seasonally,
through emphasis on such features as rural tourism and by staggering school holidays
 Other measures, to include better tourism training, easing taxation, etc.

THE ECONOMIC, SOCIAL, AND ENVIRONMENTAL IMPACTS OF TOURISM

TOURISM IMPACTS

The impacts of tourism include the effects of tourism on the environment and on destination

Tourism impacts fall into three main categories

i. Socio-cultural impacts of tourism

ii. Economic impacts of tourism
iii. Environmental impacts of tourism

Socio-Cultural Impacts of Tourism

Sociocultural impacts are associated with interactions between people with differing cultural
backgrounds, attitudes and behaviors, and relationships to material goods. The introduction of
tourists to sensitive areas can be detrimental, cause a loss of culture, or, alternatively, contribute
to the preservation of culture and cultural sites through increased resources.

Positive Socio-Cultural Impacts of Tourism

 Lead to rebirth of culture
  Its incentive for preservation of culture
 Creates favorable international image
 Encourages development of educational programs
 job creation and improved standards of living;
 opportunities for linkage/cultural exchange
 stronger appreciation of local culture and heritage
 Modernization; gender roles, lifestyles etc.
 Promotes national, regional peace and understanding
 Provision of social amenities
 Encourages cultural exchange and understanding thro. Education/training
 subsidization of infrastructure costs in remote areas

Negative social cultural impacts of tourism

 Strained Family relationships (men and marriage, role of women, youth)
 Tensions among local populace -New or reinforced social classes and ethnic groups, who
runs tourism? Does everyone have equal access to jobs? Font and back stage?
 Over-consumption of resources
 Potential to crime, - tourists as criminals or as victims?
 Prostitution and spread of communicable diseases
 Demonstration effects
 Discrimination of locals
 Stereotypes of culture
 Commercialization of culture
 Cultural shock

Economic Impacts of Tourism

Economic impacts are usually seen as positive, contributing to employment, better services, and
social stability. Cultural education may also be improved, which can be overlooked. Yet these
impacts can also contribute to high living costs within the community, pushing out local
businesses, and raising costs for local residents.

Despite recent events, tourism is still one of the fastest growing sectors in the world economy

Positive Economic Impacts of Tourism

 Tourism expenditures generate income to the host economy
 Tourism is a catalyst for economic growth by stimulating investment
 Urbanization and the development of service centers
 Tourism benefit poor people in developing countries
  The rapid expansion of international tourism has led to significant direct and indirect
employment creation.
 Tourism promotes regional economic balance and improvement.
 Tourism provides market for locally produced goods
 Revenue generation for government through taxes and foreign exchange.
 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
 Tourism can induce the local government to make infrastructure improvements such as
better water and sewage systems, roads, electricity, telephone and public transport
networks

Negative Economic Impacts

 Often rich countries are better able to profit from tourism than poor ones. Among the
reasons for this are: -
 Tourism infrastructural development can cost the local government and local taxpayers a
great deal of money.
 Diversion of funds from other critical areas such as education and health.
 Wasteful consumption and development
 Increasing demand for basic services and goods from tourists often cause price hikes, this
affects local residents whose income does not increase proportionately.
 Tourism development and the related rise in real estate demand may dramatically
increase land values and building costs.
 Dominated with foreign ownership, Unfavorable competition between MNC and local
enterprises
 Seasonal character of jobs; job insecurity, no guarantee of employment from one season
to the next, difficulties in getting training, employment-related medical benefits, and
recognition of their experience, unsatisfactory housing and working conditions.
 Wasteful investments leading to Idle or overfull capacity
 Capital leakages/flight. There are two main ways that leakage occurs:
i. Import leakage
This commonly occurs when tourists demand standards of equipment, food, and
other products that the host country cannot supply. Tourism income leaves the
country to pay for these imports.
ii. Export leakage
Transnational corporations have a substantial share in the export leakage. They are
the key investors in tourism infrastructure and facilities in least developed
destinations. This occurs through: -
- Repatriation of profits to their country of origin.
- Enclave tourism - all-inclusive" vacation packages
Environmental Impacts of Tourism

Environmental impacts affect the carrying capacity of the area, vegetation, air quality, bodies of
water, the water table, wildlife, and natural phenomena.

Positive Environmental Impacts of Tourism

 Conservation of important natural areas
 Improvement of environmental quality
 Better utilization of resources
 Conservation of archeological and historic sites
 Improvement of infrastructure

Negative Environmental Impacts of Tourism

These include: -
a. Environmental Pollution
 Water pollution through discharges of sewage
 Air pollution -Dust, dirt and emissions from vehicle
 Noise pollution from tourist transportation and activities
 Light pollution; the marine turtle experience!!

b. soil Erosion
 Damage to geological features
 Damage to river banks Compaction of soils causing increased surface run-off and
erosion
Trampling impacts on soil
 Loss of organic matter
 Reduction in soil macro porosity
 Decrease in air and water permeability
 Increase in run off
 Accelerated erosion

c. Degradation of Natural Resources

 Depletion of ground and surface water supplies
 Depletion of fossil fuels to generate energy for tourist activity
 Conflicting land use patterns
 Displacement of people

d. Visual impact
 Facilities (buildings, road signage, car parks)-scale & appropriateness
  Littering
e. Loss of Biodiversity
i. Changes in fauna species composition
 Ecological disruption; disrupted breeding and feeding habits - harassment
 Killing of animals though hunting/fishing
 Inward or outward migration of animals

ii. Impacts on vegetation

 Destruction of vegetation through the gathering of wood or plants
 Change of vegetation through clearance or planting to accommodate tourism facilities
 Breakage and bruising of stems
 Reduced plant vigor
 Reduced regeneration Loss of ground cover
 Change in species composition