FIFTH EDITION ROBERT..CHRISTIE.MILL UNIVERSITY OF DENVER ALASTAIR M. MORRISON PURDUE U y NDALL/HUNT PUBLISHING COM © Dubuque, tows s2002Tourism: An Overview of the Tourism System ‘A tourist is someone who travels to see something different, and then complains when things are not the same. Holloway, C. (1994) What is Tourism? In writing this book, we set out to do two things: Describe how tourism works and indicate how people can use this knowledge to make tourism work for them, their destination areas or businesses. Our first challenge was to put a label on the phenomenon about, which we wanted to write. “Tourism is a difficult phenomenon to describe. ‘The authors have trouble in thinking of tourism as an_ industry. Wells (1989) defines an industry as a “num- ber of firms that produce similar goods and services and therefore are in competition with one another” In no sense of the word does this describe a fourism in- dustry. While there is intense competition in tourism, especially in the post 9/11 environment, many busi nesses and other types of tourism organizations offer complementary rather than competing products and services. An airline, hotel, restaurant, travel agency, and attraction do not compete with each other. They ‘complement each other and combine to offer visitors a satisfying vacation or business tip. However, the idea of a tourism industry gives some unity to the idea of tourism. It enhances the image, credibility, and political acceptance of tourism, ‘Tour ism’s image is ambiguous to many scholars and certainly to the “person on the street” For example, scholarly arguments are common as to whether the label should be “tourism” or “hospitality.” Most ordinary people are astonished to find out that it is possible for a person to pursue a career in “tourism.” While many attempts have been made to define tourism in the past 35 years, there is no single definition that is universally accepted. ‘There is a link between travel, tourism, recreation, and leisure, yet the link is fuzzy. All tourism involves travel, ‘yet not all travel is tourism. All vacation travel involves recreation, yet not all tourism is recreation. All tourism occurs during leisure time, but not all leisure time is spent on tourism activities. Defining tourism as an in- dustry helps people to get a clearer picture of what tourism is all about. With a clearer image comes a bet ter understanding. ‘The idea of a tourism industry gives those involved a feeling of greater credibility and respedabilty, It builds a sense of belonging and camaraderie. It allows compari sons with other industries such as agriculture and ‘manufacturing. It establishes tourism’s standing in the “pecking order” of economic activities. This is certainly usefull and builds a greater public awareness of the broad scope and impacts of tourism. ‘The idea of a tourism industry is politically attractive, One of tourism’s strengths is that its benefits are felt by 1many businesses, organizations and people. Visitor spending finds its way into many pockets and purses. At first glance, this might secm an ideal way to get political support for the planning, development, man agement, and marketing of tourism. However, this apparent strength has been a huge challenge for those interested in tourism. As tourism touches so many bust nesses and people in varying degrees, its overall im- pacts are difficult to measure. There is no single indus try code for fouriim under the North American Industry Classification System (NAICS) ‘The system of Téwrism Satelite Acounts (TSA) was introduced to better reflect the impacts of tourism, throughout an economy. The World Tourism Organi. zation has been the major proponent of satelite ac counting, which it describes as follows (World Tourism Organization, 2002) So IN ORDER TO PERFORM ECONOMIC ANALYSES OF TOURISH, IT 1S NOT ONLY NECESSARY TO IDENTIFY THE s0005 AND SERVICES CONSUMED BY VISITORS BUT ALSO THE RESOURCES THESE VISITORS USE IN THE COURSE OF THEIR TRIPS, HENCE THE NEED TO IDENTIFY THE ECONOMIC UNITS THAT SUPPLY EACH TYPE OF PRODUCT CONSUMED BY VISITORS. ACCORDINGLY, BOTH THE DEMAND AND SUPPLY SIDE OF TOURISM ARE. EQUALLY RELEVANT TO THE CONSIDERATION OF TOURISM IMPACTS. THE TOURISM SATELLITE ACCOUNT (TSA) PROVIDES US WITH & HIEANS OF SEPARATING AND EXAMINING BOTH TOURISM SUPPLY AND TOURISM DEMAND WITHIN THE GENERAL FRAMEWORK OF THE SYSTEM OF NATIONAL ACCOUNTS. ‘Many people whose lives or businesses are touched by tourism are mainly engaged in other activities, The storekeeper sells to visitors and residents. While they ‘may know that tourism affects them, it is often difficult to evaluate how much it does. From a political stand: point, the idea of a tightly defined tourism industry allows organizations to demonstrate the impact and int portance of tourism. This results in more effective lob- bying with governments which brings greater political support and assistance for tourism. ‘Yet, tourism is not an industry. Tourism is an actio~ iy. In this we are supported by the United Nations Statistical Commission (1999) who decided that “The definition of tourism includes alf the activities of tour ism, and the criteria demand comparability of the statis- tics over time and between countries.” It cannot then be just one industry, since these activites are intertwined ‘among several industries. Tourism takes place when, in international terms, people cross borders for leisure and business for less than one year. Tourism also occurs 2 INTRODUCTION within each country, as people travel certain distances from their home environments for pleasure or business trips. The study of tourism is the study of this activity or phenomenon and its effects. The business of tourism is the business of encouraging this type of activity and taking care of people while they are engaged in tourism. ‘The World Tourism Organization (WTO), Madrid, Spain, is a specialized agency of the United Nations, WTO's definition of tourism is the most widely accepted around the world, “Tourism is defined as the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited” (World “Tourism Organization, 2000). WTO identifies the fol- lowing branches of tourism: © Inbound international tourism: Visits to a coun- try by nonresidents of that country. = Outbound international tourism: Visits by the residents of a country to other countries. © Internal tourism: Visits by residents and non residents within a country (domestic + inbound international). = Domestic touris own country, : Visits by residents within their ® National tourism: Visits by the residents of a country to other countries plus visits by residents within their own country (domestic + outbound international). A variety of other definitions have been offered for tourism. Although tourism is not an industry, it does incorporate a variety of different types of tourism busi- nesses and organizations. These can be divided into sectors and include (Leiper, 1990; Middleton, 1988; ‘Morrison, 2002): Accommodations, food service, and retailing: Restaurants and food services of various types, hotels, resorts, guest houses, bed and breakfasts, farmhouses, apartments, villas, flats, condomini ums and vacation ownership (timesharing), vaca- tion villages, conference center resorts, marinas, ecolodges and other specialist accommodations, shops of various types including duty free. Association sector: International, regional, national, and state trade and travel associations.‘Aturactions and events sector: Theate patks vpuseums, nacional parks, wildlife parks gardens, heritage sites, festivals and events Gonvention and exhibition sector: Consely fiom and exhibition centers, congress centers auditoriums. Destination marketing sector: National .our=t of frees, state, provincial and territorial (Ours. offices, regional travel or tourism organization’ conven: rand visitor bureaus, Local courist authorities tourism associations. Miscellaneous sector: Recreational facility op&T™ tors, providers of travelers’ checks and insurance, veuriem educators, travel writers, publishers of travel guides aad books, and other business that serve travelers’ needs. Regulatory and coordinating sector" Government agencies and non-governmental organizations that regulate and coordinate different asp of tour- ism, e.g, World Tourism Organization ‘and Interna tonal Civil Aviation Organization. + Airlines, shipping, Times, ferry services, railways, bus and motor coach ‘operators, and car rental companies ‘Travel trade intermediary sector: Tour OPN and wholesalers, retail cravel agents, convention! sreeting planners, corporate travel deparimcnls aregndive travel planners, and consolidatorsDIRECT INDIRECT INDUCED Tourists spend or: Second round of expensftres timate beneficiaries (a partial ist Lodging Wages and salaries Accouiais Food Tips and gratuities NBiieas “eres cere saa one cee Beverages Payrl axes ae Entertainment Commissions Home ons Clothing Music and entertainment Bete cae Gite and Adninstrativa and general iow sowenirs expenses Seis orsana care, Professional services SRS and video makerttiovrs ties oe oe. maccines, Purchase of food and beverage Shi mates s supotes Bertin se Photography ee Seen someon Recreston Putas of malo and moore Tours, supple Erorets sightseeing, eps and maintenance Fatpone ‘guides and local one maint rain forvarcrs transportation Advertising, promotion and ome macs Miscoltaneous eed Shenstone Uiltios Seer Transportation Heekeoning sat” is ineurance workers Llconses tease ons ‘ esa es insurance premiums ao Renta of actos and Pore equipment Pasi anepwines Interest and principal payments. Flasort una, aperstors snd workore rowed funds Resaumramncie pas aes lab oad ‘maintenance werers Income and other tax ey \ wotner taxes ‘ranporaion workers Replacement of capital assets apenas sa ot and iets and walbesses olesle sunplore Leakage: When the private or public sector purchases goods or services from sources outside the community that money is no longer subject to the multiplier effect and the economic benefits leak out of the community. Return to government 5 ge SSE EERE SEES Figure 2.2 The Multiplier Effect. This Chart Demonstrates How Tourism Spending Flows through the Economy. ‘Sac: World Tauris OrganizationQUICK TRIP 2.1 The Contributions and Negative Effects of Tourism ‘The Production and Consumption Branch of the United Nations Environment Programme (UNEP) has published some very useful information on the potential advantages and disadvantages of tourism development from an eco- nomic viewpoint. ‘The following are identified as contributions that tourism can make to economic conservation: Foreign exchange earnings: Tourism expenditures and the export and import of related goods and services generate income to the host economy and may stimulate che investment required to finance growth in other economic sectors. = Contribution to government revenues: Direct and indirect taxes earned on tourism, = Employment generation: = Stimulation of infrastructure development: Tourism can encourage local governments to invest in provid ing better water and sewage systems, roads, electricity, telephone and public transportation systems; all of which may help improve the lives of local residents. ‘The rapid expansion of international tourism has created many new jobs. © Contribution to local economies: ‘Tourism may create significant local tax revenues, as well as other direct, and indirect spending and employment. UNEP also points out that there are “many hidden costs to tourism, which can have unfavorable economic effects on the host community. Often rich countries are better able to profit for tourism than poor ones.” The agency identifies the following as the potential negative economic impacts of tourism: Leakage: The direct income is the amount of tourist spending left after taxes, profits, and wages are paid ‘outside the area aid after imports are bought. The subtracted amounts are referred to as leakage, Enclave tourism: Enclave tourism is “when tourists remain for their entire stay at the same cruise ship or resort, which provides everything they need and where they will make all their expenditures, not much oppor- tunity is left for local people to profit from tourism.” & Infrastructure costs: Local governments and taxpayers may have to make a significant investment in the in- frastructuré to serve tourism, Increase in prices: The demand for goods and services from tourists can increase the prices that have to be ‘paid by local residents, whose incomes remain constant. 8 Economic dependence of the local community on tourism: Too much emphasis on tourism can put unnec- essary stress on a local economy and local people, who must perform well to sustain the industry. Seasonal character of jobs: Tourism jobs are often seasonal, and this can lead to job insecurity. Other industry impacts affecting tourism: Economic crises in generating countries can adversely affect the econiomies of the host countries. THINK ABOUT THIS: 1, How can a small or developing country maximize the potential economic benefits of tourism, while also limit- ing the potential negative effects? 2. What can a country do to discourage enclave tourism or at least to minimize its negative effects? 8. What can a country do to help alleviate the problems caused by the seasonality of employment in tourism? Source United Nations Development Programme (2002), Economic Impacts of Tourism, hup:ivwwaneptie.org/pcliourisnvsust- tourism economic htm (ontiued) 40 PART ONE: DESTINATION;BISAS WSIUNOL 3HL JO MAIAN3AO NY SIINOL [PPOW wowskg sey a, [7 aanSp suojstoap Buléng ayeur siejenea youu hq sse001d ol; pue ‘suoNezIUEBl0 wislino} fq Bunoyeu ous “janen 0} sanneuiaye aly ‘uondaoied pue ‘uoneanow ‘speau Bulpnjou) siajanei uo seouenyul euse}xe DUP Jeuieiul oy) Guiziseydule puEweD YeyeUl 0} YoBoudde sone yaq seuinsuoo y JoueW eu Bufousnjuy sioiey au. spuewieg “E Hed syeuueyo uognquisip ue vonowosd jo asn aanosya ath uo S|SeydWe Ue Ym sioUioysno feyUejod o} Soij9e4 pue Seo|ai9s JeyveW sassauisng sino} pue sees uoWeuNsep yorum Aq sseood oui jo uoneulwexe Uy uonnguisiq ue ‘uopowioig ‘GuluUelg KBaIeAS Sunoyew z ued pasn uorevodsues jo sepow ue 'smol} janen ‘sjuswBes fenen 10fewi yo uonduasap y Fenedy Jo sonsuajoeieyg ou jOneLL “py Hed lwsuino} ejqeureisns uo siseydwe ue yy ‘ws pur ‘dojonap * wisiino, Buyjonuos ue Buldojanag ‘Bulutierg uoNeUnsed “| Weg