Economics Tourism Essay Free

Tourism has always been one of the most attractive and interesting kinds of time spending for millions of people. Tourism, as an industry, is very profitable and is considered an economical savior for the countries, especially for those, which are not so strong from the point of view of industry and economic development, but are very attractive by their historical places and rich architecture. The tourism, especially the nature tourism, brings not only economic value; it is also rather dangerous ecologically, because tourism influence ecology of the countries in the negative way. The present paper is devoted to the discussion of the environmental impacts of tourism and contains discussion of economic benefits of tourism compared to its ecological impacts.

From an environmental point of view, tourism is one of the forms of nature usage. Tourism development requires an involvement of human activity in the natural resources. This produces a special kind of landscape - recreational. In many developed countries, areas used for recreation and tourism, are on the third place after the area of agricultural and forest lands. Rapid growth of the global tourism industry and its large economic benefits makes recreational use of land and promising ability to successfully compete and displace other uses.

Nature and territories of attention of tourists are vulnerable and fragile, and recreational resources are finite, they are irreplaceable and have limited opportunities. Their spontaneous and irrational usage creates a number of environmental problems in areas of intensive tourism development, both in industrialized countries and in developing countries.

For example, Mykonos Island in Greece is a famous tourist resort, during the last 30 years, that has rapidly developed. Together with the development of the tourism industry (accommodation, bars, etc.), the island's population has also increased, in contrast to other Greek islands, where the population has recently decreased. The main reason for the increase of the island population was the development of infrastructure (construction of ports, expansion of the network of roads, dykes, etc.). It also allowed more tourists and visitors to visit the island, leading to the gaps in such problems as traffic jams, lack of parking, increased crime, and pollution of water and land resources, especially in high season. At the same time, intensive construction, tourism and infrastructure development " absorbed " most of the island, and led to the loss of farmland. Uncontrolled and rapid development of tourism has led to a complete change of two traditional villages of the island, which were merged with the newly constructed villages, and turned into a large-scale residential areas, leading to degradation of the environment, local culture and changes in the socioeconomic structure (Mathieson and Wall, 2002)

The size of the negative impacts of tourism, which the economy of many countries is currently experiencing today, is huge and many countries do not have sufficient technical and financial capacity to replenish the resources used by tourists and for the disposal of their waste. Negative impacts of tourism on the environment, which has recently been underestimated, are now becoming an object of close attention of the international community. Such effects are varied and numerous : pollution of natural objects; consumption of natural resources; development of land; degradation of natural landscapes , threats to wildlife and habitats , with consequent loss of biodiversity , finally, the breakdown of local customs and social structures.

For example, Adriatic coast of Italy was devastated due to the rapid growth of brown algae. Because of the rising level of pollution due to excessive amount of tourists, the attractiveness of such a huge national park, as the Grand Canyon in the United States has significantly decreased. Some of the famous East African game parks have turned into a pile of dust by the tourists. Greece's national treasury, which used to be white marble Parthenon in Athens , is now a symbol of  the neglect of the environment, suffered from the severe pollution. The government has taken the action to restrict the number of visitors to avoid the environmental catastrophe in the future.

Along with the burning problem of pollution and changing environmental components that are the most urgent in such recreational areas as national parks, nature reserves and suburban green areas, where attendance of tourists destroy leaves, twigs, pine needles, in other words , components containing essential nutrients. Disturbing the natural cycle and natural regeneration processes, and destroying underbrush undergrowth reduces biological activity of the soil and stands density. It leads to unbearable environmental problems and negative ecological impacts. Expansion of hospitality and the construction of a tourist destination (huge hotels; ports, making changes in the beach resort, but in the sea itself; specially setting the equipped stations for mountain tourism, etc.) have also a detrimental effect on the environment (Mathieson and Wall, 2002).

Experience Yellowstone National Park in the United States, one of the first "cradles" of tourism, illustrates the contradictory tendencies that the development of such tourism may lead to. On the one hand, the mass of visitors coming with the main purpose to visit Yellowstone provides a very substantial income for the entire state of Montana, where the park is situated: during their visit, they use other services, such as restaurants, gas stations and hotels (Gartner, 2006). However, the rapid growth of tourism seriously changed the way of life of the local citizens; they are ready to come up with it, because it will bring additional economic values to their region. Although the level of life of local residents, as well as those of the whole state, has slightly increased, they have to put up with the construction of new roads, road congestion and flow of tourists, noise pollution, gassy and rapid growth of prices for lands and properties. The concentration of visitors in the park reached a critical level, so communion with nature (the main purpose of their visit) has become almost impossible.

Negative aspects of tourism development in protected areas are more widely noticed than its positive aspects, as they are more obvious. Increase in the number of tourists, unsustainable use of natural resources, construction of hotels and other activities related to tourism, impact the environment in considerably.

It is necessary to admit that unsustainable intensive tourism development often leads to some local environmental catastrophes. Simultaneously, the development of tourism depends mainly on the quality of the environment and natural diversity. Water and air quality, aesthetics of landscape and biological diversity are the natural components of the tourism, reproducible result in the functioning of the natural ecosystems. There is hardly any kind of business, which is more interested in the preservation of all components of the environment than tourism is. While destroying the environment, tourism reduces the possibility of its development. There is a contradiction: how to resolve the problem? Are modern hospitality industry professionals look for the ways of solution?

Reasons for environmental concern

Transportation of international tourists is now carried out by planes, which annually consume a huge amount of kerosene. Thus, in 1990, 176 million tons of kerosene was used, while 550 million tons of CO2 and more than 3 million tons of NO2 has been extracted (this is a huge contribution to the "greenhouse effect" and acid rain, in its turn) (Andereck, 2003). Secondly, the usage of vehicles, which use gasoline and produce the same effect.

Construction and creation of infrastructure for the hospitality industry has led to an almost complete loss of tourist and recreational attraction in a number of places, such as Malaysia, the Caribbean, etc. Tourists and their behavior are also a powerful factor, having the negative impact on the environment. It can also lead to local environmental disasters: the catastrophic degradation of vegetation, erosion, landslides, loss of beaches, etc.

Positive economic impacts of tourism

Examples of negative impact of tourism on the environment are numerous, but at the same time, tourism can have a positive impact and contribute to the sustainable development, providing welfare and social progress. If the tourism is properly organized, it can make a significant contribution to the preservation of environment and culture. For example, together with the development of tourism over the past 50 years, a huge amount of parks and natural protected areas appeared (today there are nearly 10 000 national parks) (Johnson and Barry, 2002). Tourism is a powerful incentive for the creation of water treatment facilities, garbage disposal mechanisms, and favorable environmental conditions are the basic requirement for tourism.

Economic advantages of tourism

The most obvious advantage of tourism is creation of jobs in hotels, restaurants, retail shops and transport service organizations. Types of employment in the tourism sector are varied, ranging from work in hotels, ending the tour guides and taxi drivers. In developing countries, tourism is the driving force in almost all sectors of the economy: agriculture, construction, industry, infrastructure development, as well as in education, culture, sports and entertainment industries. Tourism growth leads to increased local demand for commodity products and the development of local markets in each sector (Frechtling, 2004). Secondly, although being less beneficial, but still having the right for existence, the support of the industry and its professions (such as consultants of effective management, tourism and university teachers, etc.), many of which bring much more revenue.

A third advantage of tourism is a multiplier effect, as the cost of tourism is processed by local economy. Governments use the model of economic impact to evaluate how tourism has increased the number of jobs in the areas of goods and services consumption. The fourth advantage of tourism is federal and local income, received from the tax revenues from tourism (Frechtling, 2004). With the help of tourism, the tax burden is transferred to non-residents. For example, more than half of income from currency exchange and tax revenues in Bermuda is at the expense of tourism. Fee for ship loading in Bermuda is $ 20 per person, this is one of the highest in the world, the same concerns the taxes on imports of durable goods, starting from cars to refrigerators. This is one of the few developed countries where there is no income tax (Johnson and Barry, 2002). Critics of this tax argue that scheme of tax system organization is not representative and leads to reckless money spending and has little to do with tourism development and improvement of the hospitality industry. Hospitality management companies and managers on tourism should make sure that the taxes related to tourism, and their return will be invested in tourism promotion and development of infrastructure with the aim to support tourism.

Despite all mentioned above, the tourism has its fifth advantage: it stimulates the export of local products. Based on estimated costs for tourist gifts, products and souvenirs made of tissue and other raw materials are ranged from 15 to 20 % of their costs (Walsh, 2006). The extent, to which these products are manufactures or assembled in this particular area, provides an economic impact on the local economy.

Worldwide, tourism has become one of the most important sectors of the national economy. Revenues from tourism are growing, adding to the national budget. Being one of the highest and the most dynamic sectors of the economy, tourism takes only the second place after oil production and refining. For example, in South Africa, tourism takes the second place for adding to the budget revenues after diamond extraction. In Alaska, tourism ranks the second place among the sectors of the economy after oil extraction and refinery. On the tourism industry accounts for about 6 % of global gross national product is taken from tourism sector, it comprises7 % of global investment as well, 5% of all tax revenues.

Some places of tourism destination, however, do not equally welcome tourists. Some places are not rich in the opportunities for economic activity, because of the inconvenient location, bad climate, limited or poor resources and the size of their cultural heritage. For certain places of tourism interest, their involvement in the tourism business evokes mixed, and sometimes ambivalent feelings (Walsh, 2006). For example, Bali is concerned that tourism destroys its culture, as the countryside becomes a resort, and new professions destroy family values ​​. "Bali and tourism is a marriage without love ," - said one of the officials from the sphere of tourism, clearly pointing and underlying the dilemma of Bali: the destruction of culture and rapid economic growth on income from more than 500,000 tourists per year (Walsh, 2006). Londoners, in their turn, are in need of the Arabic tourists’ interest to their city, although they do not feel much enthusiasm about it. Many European capitals witness mass departure of local citizens, who are trying to escape from summer flow of tourists. Some participants of the hospitality industry benefit from tourism, while others do not. Although economy can considerably benefit from, people believe that lowering of the standards of living, inconvenience and loss of cultural and social values do not worth these benefits.


Conclusion from all the mentioned above is clear: there is a direct and very precise link between tourism and environment. Organizations, working in the hospitality industry should meet all the requirements to preserve proper environment. At the same time, no branch of the global economy, except, depends so greatly on the purity of the water, beaches, air and the ideal state of nature, such as tourism. For some people wilderness provides an appropriate quality of life, while for others, this is an incentive to travel around the world to see natural attractions (Johnson and Barry, 2002). Therefore, the tourism industry should be associated only with a rational and sustainable use of natural resources. Environmental degradation poses a threat on the viability of tourism and this threat stems from the activities of other sectors of the economy, as well as from the activities related to tourism itself. It is necessary to use natural resources considerably, paying special attention to the most vulnerable parts and territories. Moreover, tourism must be reasonable and do not cause harm to nature and its resources and preserve them. The role of the government in this process is to provide the laws and regulations for sustainable tourism development in order to prevent the major environmental threats, such as global warming, loss of biodiversity and destruction of landscapes, pollution of coastal waters and freshwater shortages and air pollution.

Reference List

Andereck, K. L. (2003). The Impacts of Tourism on Natural Resources. Parks and Recreation, 28 (6), 26- 32.

Frechtling, D. C. (2004). Assessing the economic impacts of travel and tourism Measuring economic costs. In Travel, Tourism and Hospitality Research, second edition. J.R. Brent Ritchie and Charles R. Goeldner (eds). New York: John Wiley and Sons Inc.

Gartner, W. C. (2006). Tourism Development: Principles, Processes, and Policies. New York: Van Nostrand Reinhold.

Johnson, P. and Barry, T. (2002). Choice and demand in tourism. London: Mansell

Mathieson, A. and Wall, G. (2002). Tourism: Economic, Physical and Social Impacts. New York: Longman House.

Walsh, R. G. (2006). Recreation economic decisions--Comparing benefits and costs. State College, PA: Venture Publishing Co

The study of the impact that tourism has on environment and communities involved is relatively new. Impacts are not easily categorized, having direct and indirect components.[1] Also tourism is often seasonal, and impacts only become apparent after time, with varying effects, and at different stages of development.[1][2] There are three main categories.

  1. Environmental impacts: impacts that affect the carrying capacity of the area, vegetation, air quality, bodies of water, the water table, wildlife, and natural phenomena.
  2. Sociocultural impacts: associated with interactions between peoples and culture background, attitudes and behaviors, and their relationships to material goods.[1] 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.
  3. Economic impacts: usually seen as positive, contributing to employment, better services, and social stability.[3] Yet these impacts can also contribute to high living costs within the community, pushing local business out of the areas, and raising costs for locals [3][4]

Environmental impacts[edit]

{see also Environmental impacts of tourism in the Caribbean}

Ecotourism, nature tourism, wildlife tourism, and adventure tourism take place in environments such as rain forests, high alpine, wilderness, lakes and rivers, coastlines and marine environments, as well as rural villages and coastline resorts. Peoples' desire for more authentic and challenging experiences results in their destinations becoming more remote, to the few remaining pristine and natural environments left on the planet. The positive impact of this can be an increased awareness of environmental stewardship.[5] The negative impact can be a destruction of the very experience that people are seeking. There are direct and indirect impacts, immediate and long-term impacts, and there are impacts that are both proximal and distal to the tourist destination. These impacts can be separated into three categories: facility impacts, tourist activities, and the transit effect.

Facility impacts[edit]

Facility impacts occur when a regional area evolves from "exploration" to "involvement" and then into the "development" stage of the tourist area life cycle.[6] During the latter phase there can be both direct and indirect environmental impacts through the construction of superstructure such as hotels, restaurants, and shops, and infrastructure such as roads and power supply. As the destination develops, more tourists seek out the experience. Their impacts increase accordingly. The requirement for water for washing, waste disposal, and drinking increases. Rivers can be altered, excessively extracted, and polluted by the demands of tourists. Noise pollution has the capacity to disturb wildlife and alter behavior, and light pollution can disrupt the feeding and reproductive behaviour of many creatures. When power is supplied by diesel or gasoline generators there is additional noise and pollution. General waste and garbage are also a result of the facilities. As more tourists arrive there is an increase in food and beverages consumed, which in turn creates waste plastic and non-biodegradable products.

Tourist activities[edit]

For many tourists the main reason for their vacation is to engage in various types of physical activities, and enjoy interacting with nature in a way that they would not ordinarily be able to do. These activities, such as hiking, trekking, kayaking, bird watching, wildlife safaris, surfing, snorkelling, and scuba-diving all have an impact on the local ecology. Even the most environmentally aware tourist cannot help but cause some degree of impact while partaking in their activity.

There are a range of impacts from hiking, trekking, and camping that directly affect the activity area. The most obvious is the erosion and compaction of the trail itself. The daily use of the trail by hikers the trail wears the trail down and compacts it. If there are any obstacles such as fallen trees or puddles of mud, then the trail becomes widened or informal trails are created to bypass the obstacle.[7] There are a number of other direct impacts on the treaded area, such as damage or removal of vegetation, loss of vegetation height, reduction in foliage cover, exposure of tree root systems, migration of trampled vegetation, and introduction of non-native species.[8]

As well as the direct impacts, there are indirect impacts on the trails, such as a change in soil porosity, changes to microflora composition, problems with seed dispersion and germination, and degradation of soil nutrient composition.[9] As many hikers and trekkers take multi-day trips, a large number will camp overnight either in formal or random campgrounds. There are similar impacts on campgrounds such as soil compaction, erosion and composition, loss of vegetation and foliage, plus the additional issues of campfires for cooking and warmth. Informal trails are created around the campsite in order to collect firewood and water, and trees and saplings can be trampled, damaged, or cut-down for fuel. The heat of campfires may damage tree-root systems.[10] In formal campgrounds, tent pad areas are normally devoid of any vegetation while random camping can damage sensitive plants and grasses during a single overnight stay.

As with most recreation activities, including hiking and camping, there will be waste generated, food scraps, and human waste. This can cause human-wildlife interactions, such as the habituation of wildlife to human contact and unusual food sources. This can have a detrimental effect on the wildlife and pose dangers for the human. Provision for deposit, collection, and removal of all waste will also have a direct impact on the local environment.

Another activity that can have severe direct and indirect impacts on the environment is wildlife viewing. This happens in a range of formats, on land and in the ocean. Wildlife safaris in African countries such as Kenya, Botswana, and Tanzania have been popular for many years. Their focus are the big five game megafauna: the African lion, African elephant, African leopard, cape buffalo, and rhinoceros. As with every human-wildlife interaction, there is a change in the natural interaction of the species. The mere presence of humans can increase the heart rate and stress hormones of even the largest animal.[11] Other changes in behavior have been recognized. For example, baboons and hyenas have learnt to track tourist safari vehicles to lead them to cheetah kills, which they then steal.[12] This direct impact of can severely damage the delicate balance of the food webs and keystone species.

There is a small but significant number of tourists who pay considerable sums of money in order to trophy huntlions, rhino, leopards, and even giraffes. It has been argued that there is a positive and negative, direct and indirect, environmental impact caused by trophy hunting. There is a continued discussion at federal and international government level as to the ethics of funding conservation efforts through hunting activities.[13]

Another tourism destination activity is scuba diving. There are many negative direct environmental impacts caused by recreational diving. The most apparent is the damage caused by poorly skilled divers standing on the reef itself or by accidentally hitting the fragile coral with their fins. Studies have shown that "naïve" divers who engage in underwater photography are considerably more likely to accidentally damage the reef.[14] As the cost of underwater photography equipment has declined and its availability increased, it is inevitable that there will be an increase of direct damage to reefs by divers. Other direct impacts include over-fishing for "marine curios", sedimentation, and in-fill.[15] There is also direct environmental impact due to disturbed and altered species behaviour from fish feeding, as well as import of invasive species and pollution caused by dive-boats. There are also indirect impacts such as shoreline construction of superstructure and infrastructure.

Transit effects[edit]

Further information: environmental impact of transport

Since 2009 there has been a steady yearly increase in the number of tourist arrivals worldwide of approximately 4.4 percent. In 2015 there were 1.186 billion tourist arrivals worldwide, of which 54 percent arrived by air (640 million), 39 percent (462 million) by motor vehicle, 5 percent by water (59 million), and 2 percent by rail (23.7 million).[16] A seven-hour flight on a Boeing 747 produces 220 tonnes of CO2, which is the equivalent of driving an average size family saloon car for a year, or the energy requirement of an average family home for nearly 17 years.[17] With the ever-increasing number of tourist arrivals, there is an ever-increasing quantity of global greenhouse gasses (GHG) being produced by the tourism industry. In 2015 it is estimated that 5 percent of global GHG emissions was attributable to air travel alone.

As more eco-tourists seek remote, pristine, undeveloped regions, and practise low-impact, "leave no trace" adventure vacations, their GHG contributions have increased exponentially. As a result of the accumulation of GHGs the annual average global temperature is rising each year. New records were set in 2014, 2015 and it is predicted that 2016 will yet again exceed the previous highest average global temperature.[18][19] It is causing the oceans to warm and causing increased frequency of abnormal weather events such as floods and hurricanes. The increase in the amount of CO2 dissolved into the oceans is changing its chemical composition, leading to acidification of the oceans, which in turn has led to bleaching of coral reefs worldwide.

In 2016 it was determined that the world's largest coral reef, the Great Barrier Reef, is so badly affected by bleaching that only 10 percent remained unspoiled and the remaining 90 percent has varying degrees of degradation[20] A recently discovered issue in the Pacific Northwest caused by acidification, is the decreased survival of pteropods, a key source of food for salmon. These microscopic invertebrates, known as sea butterflies, are unable to form their outer shells and die.[21] These tiny creatures make up a significant portion of the salmon diet. Without this nutrition available to the salmon, they may not grow to maturity to return to their spawning grounds to reproduce and provide food for bears. Bears cycle nutrients through the forest, where tourists come to view or hunt the bears. Thus the food web is disturbed. Anthropogenic climate change has both a direct and indirect impact on tourism.

Sociocultural impacts of tourism[edit]

An inherent aspect of tourism is the seeking of authenticity, the desire to experience a different cultural setting in its natural environment.[22][23] Although cultural tourism provides opportunities for understanding and education, there are serious impacts that arise as a result. It is not only the volume of tourism at work, but the types of social interactions that occur between tourist and host. There are three broad effects at the local level: the commodification of culture, the demonstration effect, and the acculturation of another culture.

Commodification of Culture[edit]

Commodification of culture refers to the use of a cultural traditions and artifacts in order to sell and profit for the local economy. With the rise of tourism, authors argue that commodification is inevitable.[24] There are both positive and negative sociocultural impacts of commodification on a culture. One positive is the creation of business and jobs for local craftsmen, who are able to sell their goods to tourists. Rural tourism is seen as a “cure” for poverty and leads to the improvement of transportation and development of telecommunications in an area.[25] For the tourist, commodification creates an interest for traditional arts and social practices.[24] However, critics of commodification believe that tourists are not interested in cultural beliefs and traditions of the locals, but are rather obsessed with owning a part of it. The argument that by monetizing cultural artifacts locals lose the value to their culture also exists. It then leads to the belief that tours are no longer authentic experiences. However, development economists will argue that culture can be utilized just as any other natural resource.

Researchers look at the impact of tourists on a culture and in short, many argue that the contact with the secular West leads to the destruction of pre-tourist cultures.[24] In addition, the “development cure”, the idea that increasing tourism will spur economic change while strengthening local culture, is claimed to lead to new diseases, such as “drug addiction, crime, pollution, prostitution, and a decline in social stability” as well as growth of capitalist values and a consumer culture. [24]

Demonstration Effect[edit]

The demonstration effect was introduced to tourism when researchers were looking into the effects of social influences from tourism on local communities. The demonstration effect argues that local inhabitants copy the behavioral patterns of tourists.[26] There are a number of social, economic and behavioral reasons as to why the demonstration effect comes into play. One economic and social reason is that locals copy the consumption patterns of those higher up the social scale in order to improve their social status.[26] Tourism has also been accused of affecting social behavior of the younger members of a host community, who may imitate what tourists do, impacting traditional value systems.

Criticisms of the Demonstration Effect in Tourism[edit]

There are many criticisms to the demonstration effect in tourism. Firstly, tourism is seen as only one aspect of change in a society. Local people will also see examples of foreign lifestyles and consumption in advertisements, magazines, on television, and in films, and therefore tourism is not the only influence on local culture.[26] In addition, the demonstration effect implies that a culture is “weak” and needs to be protected by outside influences. In many cases, the demonstrative effect is seen as a negative consequence, but it is argued that “all cultures are in a continual process of change”,  therefore tourism should not be considered destructive.[26] Also, there are arguments that the demonstration effect works the opposite as well, where a local culture will influence tourists, and the tourists will imitate local behavior.


Community participation refers to the collaboration between community members for the purposes of achieving common goals, improving their local community and pursuing individual benefits.[27] Local community members are actively involved in tourism, rather than passively benefiting from it. Community participation strengthens communities and help to create a sense of belonging, trust and credibility among members.[27] By involving local community members, tourism can become more authentic. The community and the tourists both benefit from community participation, as it boosts their respect for the traditional lifestyle and values of the destination community. Most destination community members are also the ones most impacted by tourism, therefore there is an importance in their involvement in tourism planning. Some researchers will argue that some of the negative impacts of tourism might be avoided and the positive impacts maximized through community participation in the planning process.[27]


Acculturation is the process of modifying an existing culture through borrowing from the more dominant of cultures. Typically in tourism, the community being acculturated is the destination community, which then experiences dramatic shifts in social structure and world view. Societies adapt to acculturation in one of two ways. Innovation diffusion is when the community adopts practices that are developed by another group; whereas cultural adaptation is less adoption of a new culture and more the process of changing when the existing culture is changed.[28] Acculturation is often seen as a method of modernizing a community and there are many opposing views to the concept of modernization. One argument against modernization is that it contributes to the “homogenization of cultural differences and the decline of traditional societies”.[28] This means that communities will advertise their modernity to attract tourists, and will disregard their traditional customs and values. On the other hand, others argue that acculturation and modernization will help traditional communities adjust in a modern world. The idea being that teaching people to adapt will save the community from future extinction.

Positive Sociocultural Impacts[edit]

There a number of benefits for the host community as a result of tourism. This includes economic benefits such as opportunities for local businesses which allows for increased trade among the increased number of visitors and then develops a variety of local businesses. In addition, tourism also brings employment opportunities, enhances the economy of the region, and creates revenue for the local government. Tourists also use public services, creating funding for public services, such as health, the police and the fire department, as well as increasing the demand for public transport. Other public facilities, such as parks and benches are also well kept by the community for the tourists, improving the overall aesthetics of the host community. On a more social level, tourism leads to intercultural interaction. Tourists often engage and learn from the locals. Tourism can also increase pride in locals. They want to show off their community that tourists have chosen to visit. The increase in people also leads to creating more social venues and experiences where locals and tourists can interact in. Entertainment and recreational facilities will allow for more opportunity to socialize and engage with each other.[29] Tourism can be beneficial for the host community as it provides the financial means and the incentive to preserve cultural histories, local heritage sites, and customs. It stimulates interest in local crafts, traditional activities, songs, dance, and oral histories. It also opens up the community to the wider world, new ideas, new experiences, and new ways of thinking.[30][30]

Negative Sociocultural Impacts[edit]

There can be negative effects from cultural interactions.[31] In terms of economic disadvantages, local communities need to be able to fund the tourist demands, which leads to an increase of taxes. The overall price of living increases in tourist destinations in terms of rent and rates, as well as property values going up. This can be problematic for locals looking to buy property or others on a fixed income.[29] In addition, to balance out tourist destinations, the number of locals to tourists must be relatively equal. This can be more problematic for tourists as their access could be denied. Other negative sociocultural impacts are differences in social and moral values among the local host community and the visiting tourist. Outside of affecting the relationship between tourist and local, it can also cause friction between groups of the local population. In addition, it can cause drifts in the dynamics between the old and new generations. Tourism has also correlated to the rise of delinquent behaviors in local host communities. Crime rates have been seen to rise with the increase of tourists. Crimes are typically those of rowdy behavior, alcohol and illegal drug use, and loud noise. In addition, gambling and prostitution is increased due to tourists looking for a “good time”.[29] Tourism has also caused more disruption in host communities. Crowding of locals and tourists may create a vibrant ambiance, it also causes frustration and leads to the withdrawal of local residents in many places. Increased tourists also results in increased traffic which can hinder daily life of the local residents.[29]

Economic impacts[edit]

Global tourism in 2014 contributed 3.7 percent (US$2.5 billion) to the world's GDP, with its total contribution rising to almost 10 percent of world GDP.[32] The GDP increase comes from the over one billion international tourists worldwide, a number that has been growing by 5 percent annually since 2012.[33][34] Visits and boosts to GDP are expected to continue to rise in the near future as falling oil prices contribute to reduced living costs and increased available income for households, as well as reduced costs for air travel.

Tourism can be divided into subcategories into which impacts fall: spending from visitors on tourism experiences like beach holidays and theme parks (domestic and international), spending on leisure items like bicycles, business spending, and capital investment.[32][35]

The economic contribution of tourism is felt in both direct and indirect ways, where direct economic impacts are created when commodities like the following are sold: accommodation and entertainment, food and beverages services, and retail opportunities. Residents, visitors, businesses, and various levels of governments (municipal to federal) all influence direct tourism impacts through their spending in or near a given tourism area.[32][33][36] The key component of direct economic impacts of tourism is that they occur within a country's borders and are implemented by "residents and non-residents for business and leisure purposes".[32]

In contrast, indirect economic impacts of tourism can be found in investment spending surrounding a tourism offering from private and governmental interests. This investment may not explicitly be related to tourism, but benefits the tourist and local stakeholders all the same.[32] Indirect impacts of tourism are exemplified by the purchase and sale of intermediary items like additional supplies for restaurants during the high tourism season, or widened sidewalks in busy downtown centres.[33] Indirect economic impacts (the supply chain, investment, and government collective) account for 50.7 percent of the total GDP contribution from travel and tourism in 2014.[32]

Induced spending, the re-circulation of a tourist dollar within a community, is another way that tourism indirectly has an impact on a community.[37] For example, a foreign tourist injects money into the local economy when he spends a dollar on a souvenir made by a local at the tourism destination. That individual goes on to spend that dollar on lunch from a local vendor, and that vendor goes on to spend it locally.[1][38]

Positive and negative economic impacts of tourism[edit]

There are both positive and negative effects on communities related to the economic impacts of tourism in their communities.[37][38] A positive impact can refer to the increase in jobs, a higher quality of life for locals, and an increase in wealth of an area. Tourism also has the advantage of rebuilding and restoring historic sites and encouraging the revitalization of cultures.[39] A positive impact is to increase or to make better either for the tourist, the host community and residence and/or the tourist destination. Positive impacts are related more to the materialistic well-being, rather than to the happiness of a host community or tourist.[40]

The tourist destination enjoys positive impacts, if there have been improvements to the natural environment such as protection, national parks, or man-made infrastructure, waste-treatment plants. Tourism provides the economic stimulus to allow for diversification of employment and income potential, and develop resources within the community. Improvements in infrastructure and services can benefit both the locals and the tourists.[22][23][1] Whereas, heritage tourism focuses on local history or historical events that occurred in the area, and tends to promote education.[41] Positive impacts begin when there is an increase in job opportunities for locals as the tourism industry becomes more developed. There is also an increase in average income that spreads throughout the community when tourism is capitalized on.[37] In addition, the local economy is stimulated and diversified, goods are manufactured more locally, and new markets open for local business owners to expand to.[37] Unfortunately, these benefits are not universal nor invulnerable. While more employment may be available, tourism-related jobs are often seasonal and low-paying.[37] Prices are known to fluctuate throughout the year. They rise in the high tourist season to take advantage of more tourist dollars, but have the side effect of pricing goods above the economic reach of local residents, effectively starving them out of a place that was once their home.[33][37]

Negative impacts are the effects, that are caused in most cases, at the tourist destination site with detrimental impacts to the social and cultural area, as well as the natural environment. As the population increases so do the impacts, resources become unsustainable and exhausted, the carrying capacity for tourists in a destination site may become depleted.[42] Often, when negative impacts occur, it is too late to impose restrictions and regulations. Tourist destinations seem to discover that many of the negative impacts are found in the development stage of the tourism area life cycle (TALC).[42]

Additionally, the economics of tourism have been shown to push out local tourism business owners in favour of strangers to the region.[37][1][38] Foreign ownership creates leakage (revenues leaving the host community for another nation or multinational business) which strips away the opportunity for locals to make meaningful profits.[37][43] Foreign companies are also known to hire non-resident seasonal workers because they can pay those individuals lower wages, which further contributes to economic leakage. Tourism can raise property values near the tourism area, effectively pushing out locals and encouraging businesses to migrate inwards to encourage and take advantage of more tourist spending.[37]


Employment, and both its availability and exclusivity, are subsets of economic impacts of tourism.[43]Travel and tourism create 10.7 percent of the total available jobs worldwide, in both the direct and indirect tourism sectors.[32][43] Direct tourism jobs, those that provide the visitor with their tourism experience include, but are not limited to: accommodation (building, cleaning, managing), food and drink services, entertainment, manufacturing, and shopping[37][38][43] Indirect tourism employment opportunities include the manufacturing of aircraft, boats, and other transportation, as well as the construction of additional superstructure and infrastructure necessary to accommodate these travel products (airports, harbours, etc.)[43]

Tourism Satellite Account (TSA)[edit]

The World Travel and Tourism Council (WTTC) tourism satellite account (TSA) is a system of measurement recognized by the United Nations to define the extent of an economic sector that is not so easily defined as industries like forestry or oil and gas[43] Tourism does not fit neatly into a statistical model; because it is not so much dependent on the physical movement of products and services, as it is on the position of the consumer.[43][44] Therefore, TSAs were designed to standardize these many offerings for an international scale to facilitate better understanding of current tourism circumstances locally and abroad.[43] The standardization includes concepts, classifications, and definitions, and is meant to enable researchers, industry professionals, and the average tourism business owner to view international comparisons.[43] Before TSAs were widely implemented, a gap existed in the available knowledge about tourism as an economic driver for GDP, employment, investment, and industry consumption; indicators were primarily approximations and therefore lacking in scientific and analytical viewpoints.[36][43][44] This gap meant missed opportunities for development, as tourism stakeholders were unable to understand where they might be able to better establish themselves in the tourism economy. For example, a TSA can measure tax revenues related to tourism, which is a key contributor to the level of enthusiasm any level of government might have towards potential tourism investment.[43] In addition, Tyrrell and Johnston [43] suggest that stakeholders in tourism benefit from the TSA because it:

  • provides credible data on the impact of tourism and the associated employment
  • is a framework for organizing statistical data on tourism
  • is an international standard endorsed by the UN Statistical Commission
  • is an instrument for designing economic policies related to tourism development
  • provides data on tourism's impact on a nation's balance of payments
  • provides information on tourism human resource characteristics

Through collection of more qualitative data and translating it into a more concise and effective form for tourism providers, TSAs are able to fill the previous knowledge gap.[44] Information delivered and measured by a TSA includes tax revenues, economic impact on national balances, human resources, employment, and "tourism's contribution to gross domestic product".[43]

Projections for 2020[edit]

Predictions for the extent to which impacts of tourism will impact the world's economic system appear to agree that the number of international tourist arrivals will reach approximately 1.6 billion by the year 2020.[33][43] Of those tourists, 1.18 billion are expected to be intra-regional, and 377 million to be long-haul.[43] Of these travelers, arrivals in developing countries are expected to continue growing from the recorded 47% of total arrivals recorded in 2011 as access to these more remote locations becomes easier[33][34][35] Direct contributions of travel and tourism to the world economy and GDP are expected to rise from 3.09% in 2015 to 3.3% in 2025, with the most impacts found in the investment and supply chain sectors.[32]Employment is anticipated to rise parallel to GDP contributions; reaching 3.9% of world employment in 2025 (up from 3.6% in 2015).[32] Direct tourism employment in 2025 will be an estimated 3.9% of total world employment (up from approximately 3.6% in 2015), while indirect tourism employment will be at approximately 4.5% (up from 3.6% in 2015).[32]

See also[edit]


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