MACRO PERSPECTIVE OF TOURISM AND  Tourism and hospitality employees in developed

HOSPITALITY nations are usually paid less. In developing

countries the opposite is true.

CHAPTER 6: THE IMPACTS OF TOURISM AND

HOSPITALITY 3 Types of Employment

1. Direct Employment
 Generated as a result of providing goods
The Positive Economic Effects of Tourism and and services directly to tourist in hotels,
Hospitality restaurants, bars, nightclub, and the like.
1. Effects on Income
2. Indirect Employment
2. On employment
3. On the area’s balance of payments with the  Consists of those positions that are
outside world associated with other tourism-related
4. On investment and development activities but are used by both the local
resident and the tourist.
 Shops and food wholesalers are
considered to be sources of indirect
Income employment.

 Tourism income, in general, comes from wages

3. Induced Employment
and salaries, interest, rent, and profits.
 Refers to people working in positions only
 Tourism and hospitality is a labor-intensive
peripherally related to tourism and
industry, the greatest proportion of its income is hospitality, but generated because of it.
derived from wages and salaries.
 Examples are construction workers,
 Income is also generated from interest, rent, and
merchants, and professionals such as
profits on tourism and hospitality businesses such
doctors and accountants who service the
as interests paid on loans to an airline in order to
employees working directly in tourism-
buy aircraft, or rent paid to a landowner for a car
related positions.
park.
 Income is also obtained from direct taxation or
indirect taxation.
 Imposing value-added tax (VAT) on hotel bills is Balance of payments
an example of indirect taxation.
 Balance of payments is an accounting of flow of
 Tourism and hospitality is both an income
goods, services, and funds in and out of the
generator and income redistributor.
country during a given period.
 The sum of all income in a country is called the
 If a country pays or agrees to pay more money
national income.
than it receives, it has a deficit in its balance of
 The most common method for estimating the
payments.
income generated from tourism and hospitality is
 If it receives more money than it sends or exports,
by determining the multiplier for a destination.
it has a surplus in its balance of payments.
Multipliers are means of how much extra income
is produced in an economy as a result of the initial
spending or injection of cash.
Investment and Development

 Once an area has become economically

Employment successful, businessmen and government
agencies may be influenced to invest in tourism
 Tourist industry offers more employment
and hospitality and other industries in that area.
opportunities than other economic sectors.
This is known by economists as an accelerator
 Generating employment is perhaps the greatest
concept.
advantage of tourism and hospitality on a
developing economy.
 Negative Economic Aspects of Tourism and
Hospitality
 High inflation and land speculation destination
 High leakages from the economies of developing
countries
 Low returns on investments because of seasonal
fluctuations in demand
 Overdependence on tourism and hospitality
Inflation and Land Values
 The inflationary effects of tourism and hospitality
can arise in different ways. Rich tourists can afford
to buy items at high prices. Retailers, realizing that
their profits can be greatly increased by catering to
tourists, increase their prices on certain products
and provide more expensive goods and services.
 Stores can compete more successfully with those
catering to local residents. They can afford to pay
higher rents and taxes which are passed on to the
customers through higher prices. Thus, local
residents have to pay more for their goods,
 Inflation within destination areas is also caused by
increasing land values.
High Leakages
 Leakages occurs from a variety of sources:
 It occurs from the cost of goods and services
that must be imported to satisfy the needs of
tourists.
 Remittance of profits and wages to outside
sources.
 Expenditure for promotion and publicity to
encourage tourists to visit a certain
destination.
Seasonality
 The seasonality of demand is reflected in hotel
occupancy rates. Many hotels experience greatly
reduced revenues during the off season.
 Accommodation investments are not the only ones
with a low rate of return; tour operators also face
similar problems.
Overdependence on Tourism and Hospitality
 Tourism is highly susceptible to changes from
within and outside the industry.
 The decrease in demand for a destination results
in underutilization of services, unemployment, and
loss of income.
Impact Control Measures
Edward Inskeep (1991), a consultant for the
United Nations World Tourism Organization (UNWTO),
has suggested the following ways to maximize the benefits
of tourism and hospitality to the destination area:
1. Develop tourism and hospitality gradually so that
local residents can have sufficient time to adapt to
it and understand it. It would also allow the
government to properly plan, organize, and
monitor tourism and hospitality,
2. Maintain a scale of tourism and hospitality
development that is appropriate for the local as
well as national environment. If possible, develop
other economic sectors so that there is balanced
economy and employment structure. In some
areas, small-scale and dispersed forms of tourism
are more suitable than concentrated mass tourism
development.
3. Involve residents and their spokesmen in planning
and decision-making so that they can participate
in determining the future of this sector.
4. Apply the concepts of tourism development zones.
5. Make certain that residents have easy access to
tourist attractions, facilities, and services including
reduced admission fee if necessary, and that
important amenity features have public access
and are not preempted by tourism.
6. Provide incentives to local ownership,
management, and operations of hotels and other
tourist facilities and services so that residents can
receive direct economic benefits.
7. Develop strong linkages between tourism and
hospitality and other economic activities such as
agriculture, fisheries, handicrafts, and
manufacturing to help develop these sectors,
reduce leakage of foreign exchange through
import substitution, and spread the economic
benefits of tourism and hospitality.
8. Plan, develop, and organize tourism and
hospitality so that no area becomes too congested
with tourists, and residents can easily use
community facilities and services.
9. Train local people to work effectively in all levels of
tourism and hospitality, including managerial and
technical positions, in order to reduce the number
of imported employees and to lessen possible
 misunderstanding between tourists and local  A mixture of both pleasure seeker and
employees. business traveler.

6. Mass Tourist
 Comes from a middle class.
Social Impacts of Tourism and Hospitality
 Arrives in destination with other tourists.
The social impacts of tourism and hospitality  There is a diversity of tastes among them
should not be confused with the popular term “social and their attitude is “you get what you pay
tourism.” The social impacts of tourism and hospitality for.”
refer to the changes in the quality of life of residents of
tourist destinations. The objective of social tourism is to 7. Charter Tourist
ensure that tourism is accessible to all people.  Comes “en masse” with others of his kind
creating an extremely high amount of
business and receiving a high degree of
standardization in services and products.
Host-Visitor Interactions
 The interaction between the visitors and
Smith (1997) categorized tourists into several types the hosts is limited and impersonal.
and outlined her views on the intensity of interaction
between tourists (visitors) and the local residents (hosts).
Her classifications are as follows: Frequency and Types of Tourists and Their
Adaptation to Local Norms
1. Explorer
 This type of visitor is interested in being Types of Number of Adaptation to Local
an active participant-observer among the Tourists Tourists Norms
population. Explorer Very limited Adapts fully
 The explorer easily adapts to local Elite Rarely seen Adapts fully
lifestyles and does not need special tourist Offbeat Uncommon but Adapts well
accommodations. seen
Unusual Occasional Adapts slightly
Incipient Mass Steady flow Seeks Western
2. Elite
amenities
 This type of tourist is few in number. Mass Continuous Expects Western
 Can afford to pay well for unusual influx amenities
vacations. Charter Massive arrivals Demands Western
 Well-travelled and usually known as “the amenities
jet-setter.”
 Arrangements are either made by travel
Positive Social Effects of Tourism and Hospitality
agent or may be pre-planned.
 Differs from explorer in his attitude.  It creates a new medium for social change and
multicultural understanding.
3. Offbeat  It encourages adaptation to the realities of modern
 This tourists adapts well to simple life and works toward improving the host country’s
accommodations and services provided environment and lifestyle options.
for the occasional guest.  It promotes knowledge and use of foreign
languages.
4. Unusual Tourist  It improves health conditions and disease control.
 This tourist loves sub-exotic cultural sites
and the unusual or primitive sites as long
as he can quickly and safely return to
more familiar surroundings and group. Social Change and Multicultural Understanding

 One of the most important benefits of tourism and

5. Incipient Mass Tourist
hospitality is the bringing together or diverse
 This is a visitor who looks for the
people to help them understand one another.
amenities of Western societies in hotels
 Pope Pius XII touched on this aspect of tourism
and other travel-related facilities.
and hospitality when he spoke of “subjecting
 oneself, joyfully or sorrowfully, to the
inconveniences, great or small, which can with
difficulty the avoided.”
 The United Nations Word Tourism Organization
(UNWTO) considers tourism as an encounter
between a person and a destination in its natural
setting.

Adaptation to the Realities of Modern Life and

Improvement of the Host Country’s Lifestyle

 This positive social benefit is the result of the

following:
- The quality of life improves in places where
tourism and hospitality is being developed by
bringing both the urban infrastructure and
population benefits together.
- The changes occur in occupation and income
patterns create a middle class with its different
attitudes, values, and social concerns.
- Increased social mobility results in new
employment opportunities in tourism and
hospitality.
- Changes in family relations occur through the
employment of women outside the home. This
increases the family income and gives the
worker’s children more opportunity for higher
education.

 Tourism and hospitality promotes progress and

modernization through exposure to other attitudes
and values. It brings about improvements in
facilities and services as well as improvements in
the lifestyles and quality of life of the residents of
the host country.