ENDTERM TOPICS

The Economics of Tourism

The Sociology of Tourism
Tourism and Culture
The Role of Tourism in Economic Development

• Several developing countries have used tourism development

as an alternative to help economic growth. The reason for this
are:
• 1st there is a continuous demand for international
travel in developed countries.
• 2nd as income in developed countries increases, the
demand for tourism also increased at a faster rate.
• 3rd developing countries need foreign exchange to
aid their economic development.
The Organization for Economic
Cooperation and Development (OECD)

has concluded that tourism provides a major

opportunity for growth for countries that are at the
intermediate stage of economic developing and
require more foreign exchange earnings.
 Economic Impact

When travellers outside the destination area spend on goods

and services within the destination, tourism acts as an export
industry by bringing in revenues from outside sources. Tourist
expenditures also increase the level of economic activity in
the host area directly.
Many countries have utilized tourism as a mean to increase
foreign exchange earnings to produce investment necessary
to finance economic growth.
Tourism is an invisible export which differs from international trade
in many ways.

1. The consumer collects the product from the exporting country

2. The demand for pleasure travel is largely dependent on non-economic
factors, such as local disturbances, political unrest and changes in the
fashionability of resorts/countries created mostly by media coverage.
Price elastic and income elastic.
3. The exporting or tourist receiving country can manipulate exchange rates
so that those for tourists are higher or lower than those in other foreign
trade markets.
4. Tourism is a multifaceted industry that directly affects several sectors in
the economy such as hotels, shops, restaurants, local transport firms,
entertainment establishment, handicraft producers and indirectly affects
many others such as equipment manufacturers and utilities.
5. Tourism brings many more nonmonetary benefits and costs than other
export industries such as social, cultural and environment benefits and
costs.
 Direct and Secondary Effects

In order to measure the economic impact of tourism are on the

destination area, it is important to know the direct and secondary
effects of visitor expenditures on the economy of the area. Tourist
expenditures received as income by business such as hotels,
restaurants, car rentals, tour operators and retail shops serving
tourists have a direct effect on the economy of the host area. The
term direct means that the income is received directly,
Indirect or secondary effects mean that the money paid by tourists
to businesses are turn used to pay for supplies, wages of workers
and other items used in producing the products or direct services
bought by tourists.
The Social Effects of Tourism

Tourism is concerned with the movement of and contact

between people in different geographical locations.
•Social relations between people who would not
normally meet.
•The confrontation of different cultures, ethnic groups,
lifestyles, languages, levels of prosperity, etc.
•The behaviour of people released from many of the
social and economic constraints of everyday life.
•The behaviour of the host population, which has to
reconcile economic gain and benefits with the costs of
living with strangers.
Socioeconomic Variables and Their Effect on Travel

Age (younger vs. older people)

Younger People
•Tend to select more active recreational activities that older
people.
Elderly (those in the late sixties and upward)
•Prefer more passive forms of recreation such as visiting friends
and relatives, fishing, sightseeing and playing golf.
•Older tourist tend to travel to farther destinations,
•Prefer ship, travel, travel more in spring
•Spend less than middle age tourists but more than younger
tourists.
Income and Social Status
(Income and Status have great influence on travel)

Higher social status

•Rich person
•Higher income tourists stay longer and spend more
per day than those with lower incomes.

Lower social status

•Are the opposite.
Education

There is a strong correlation between education and

travel. The better educated members of the Population
have a greater desire travel.
Researchers have found that the more educated the
travellers are, they tend to be more sophisticated in
their tastes. They prefer activities which require the
development of Interpretative and expressive skills such
as attending plays, concerts, arts museums, reading
books. Playing golf, Tennis and skiing.
Life Stages of the Family

The presence of children in the family limits

travel. More leisure time is spent at home. As the
children grow up and leave home, the married
couple renew interest in travel. Couples in this
life stage usually have more discretionary income
and are more financially capable to travel.
Culture
- “set of belief, values attitudes, habits and forms
of behavior that are shared by a society and are
transmitted from generation to generation.

Culture Shock
- Lack of understanding and inability to
communicate with the host culture.
Effects of Culture on Travel

Internal forces

- people who are willing than others to try new things. “Mass follow
class” suggests thats a destination first attracts a small number of
high-status individuals whose actions are eventually copied by a large
number of persons with lower social status.

External forces

- Contact with other environmental may change previous attitude and

behavior.
Cultural Factors with Tourist Appeal

1. Art
2. Music and Dance
3. Handicraft
4. Industry and Business
5. Agriculture
6. Education
7. Literature and Language
8. Science
9. Government
10.Religion
11.Food and Drink
12.History