Using language of mediation

Is there any way

1

Tourism and Local Economic Development

Tourism and Local Economic Development

How can businesses in travel and tourism increase

the contribution of the industry to local

economic development and pro-poor growth?

PARTNERS & SPONSORS2 Tourism and Local Economic Development

T

he International Tourism Partnership recently held an event entitled ‘Tourism and Local Economic

Development’. This event was chaired by Dr Harold Goodwin of the International Centre for Responsible

Tourism, University of Greenwich, and Chair of the Academic Advisory Panel of the International Tourism

Partnership and sponsored by Sco Wilson to examine tourism and local economic� development.

Key speakers included Stuart Robson of Sco Wilson who made a presentation on the Equator� Principles

and the policy frameworks; Dilys Roe of IIED on tourism in Poverty Reduction Strategy Papers; and Peter

Nize e of the International Centre for Responsible Tourism on the Nepalese government� national policy and

implementation strategy to tackle poverty, which has tourism as its focus.

Focussing on private sector initiatives, Caroline Ashley of ODI talked about their Pro-Poor Tourism Pilot in

South Africa; Susy Karamel of GTZ presented the results of their work on the local economic impact of allinclusives and Stephen Na ras of Exodus presented a tour operator’s perspective� on developing complementary

products.

Following the presentations, the seminar addressed the issue of “How can businesses in travel and tourism

increase the contribution of the industry to local economic development and pro-poor growth?” There were

participants from the industry, destinations, consultancies and research institutes.

THE CHALLENGE

The seminar raised a variety of challenges that face the tourism sector. How these challenges are met will certainly

influence the sector in the long-term, and it is clear that positive initiatives by the industry will enable local and regional

economic development, including that which has a poverty alleviation agenda, to take place in parallel with the needs of a

viable economic business. In fact, it was argued by some that these two components of tourism should not be separated.

To achieve this aim there needs to be a co-ordinated approach across the sector

and this includes the financiers, developers, operators, hoteliers and Government.

This task might best be achieved through adoption of a framework to guide those

involved in the sector.

The National Guidelines for Responsible Tourism developed in South Africa were

published by the Department for Environmental Affairs and Tourism in 2002 and they

were adopted as the national sector planning guidelines for tourism. The guidelines

cover the economic, social and environmental agendas for responsible tourism. The

section on Guiding Principles for Economic Responsibility is a specific checklist of

actions that people in the industry could take to increase the positive impact on local

economic development. For a copy of the Guidelines for Responsible Tourism visit

www.icrtourismsa.org where you can download South Africa’s Responsible Tourism

Guidelines and the handbook published in 2003 Responsible Tourism Handbook

2003.

These guidelines were developed with and for the industry in South Africa. It is recommended that, using the South

African example as a guiding principle, different guidelines could be developed for other destinations and that there is

scope to develop guidelines for particular parts of the industry for example hoteliers, tour operators and guides.

Introduction3

Tourism and Local Economic Development

LOCAL ECONOMIC DEVELOPMENT

AND POVERTY REDUCTION

The UN Millennium Development Goals include specific commitments to

reduce by one-half the proportion of people living in extreme poverty by 2015.

Poverty is a multi-faceted concept which embraces not only insufficient levels

of income but a lack of access to essential services such as education, water and

sanitation, health care and housing.

At the same time, the World Tourism Organization estimates that tourism

accounts for up to 10% of global gross domestic product, making it the world’s

biggest industry. The potential for tourism to contribute significantly to

poverty alleviation is considerable. Work since 1998 by the Pro-Poor Tourism

Partnership (Ashley, Goodwin & Roe) has demonstrated that tourism can

contribute to poverty reduction and that for many of the least developed

countries, and in many rural areas, tourism is one of the few current viable

strategies for economic development.

The World Tourism Organization’s report on Tourism and Poverty Alleviation

published for the World Summit on Sustainable Development in Johannesburg

in 2002 drew substantially on the work of the Pro-Poor Tourism Partnership

www.propoortourism.org.uk and there are now a range of initiatives taking

place on pro-poor tourism.

An Agenda for Change?

Discussion focussed on what could be done to further the local economic

development agenda at the inception and development phase by investors

and developers, the role of hoteliers and that of tour operators. In each of

these tourism sectors the significance of Socially Responsible Investment has

a differential impact depending upon the extent to which there is perceived

commercial advantage.

The following points illustrate the general consensus of the delegates; specific

areas of concern and opportunity are addressed subsequent to this.

• There was general agreement about the importance of facilitating local

community access to the tourism market (comprising tourists and the

tourism industry locally) in order to maximise linkages and minimise

leakages.

• Support for strategies which assist the development of local capacity to

realise these opportunities.

• Developers and financiers, hoteliers and tour operators can all act to create

those opportunities to assist local communities to benefit from them.

• The importance of measuring and demonstrating impacts on local economic

development and the reduction of poverty was emphasised, it is time to

move beyond statements of general principles and to measure and report

the impacts of initiatives in specific terms.

• It is time to move from pilot projects and experiments to programmes of

action.

• Scalability is the current challenge. How do we take what we know about

how to enhance the impact of tourism on local economic development and

the reduction of poverty and implement it at the destination to make real

change?

What is Pro-Poor Tourism?

Pro-poor tourism is not a specific

tourism product; it is an approach

to tourism development and

management which ensures that

local poor people are able to

secure economic benefits from

tourism in a fair and sustainable

manner.

Pro-poor tourism may improve

the livelihoods of poor people in

three main ways:

1. Economic gain through

employment and microenterprise development;

2. Infrastructure gains: roads,

water, electricity,

telecommunications, waste

treatment;

3. Empowerment through

engagement in decision

making.

The language of pro-poor tourism

is being used widely and there is

now an emerging consensus that

it is important to move beyond

general talk about “trickledown”

and multipliers and to focus on

measurable impacts on improving

the livelihoods of poor people.

In summary, traditional views of

growth in the tourism sector need

to be accompanied by a focus on

generating economic benefi ts for

poor people in destinations.4 Tourism and Local Economic Development

THE ROLE OF THE GOVERNMENT

Whilst the role of government was not the focus a number of issues were raised:

• Establishing a ‘whole government’ agenda for tourism development is rarely achieved; this applies both between

departments at national level and between national and local government.

• How can other departments of government be engaged

in the issues of tourism development? Ministries of

Tourism are o en seen as junior players in government �

and it can be very difficult to engage ministries of

finance, trade and industry in cross government efforts

to harness tourism for development.

• Tourism is o en seen as an industry which benefits �

elites. When people look at the industry they see

hoteliers and tour operators, they see wealth. How

do we raise awareness in government, and amongst

national decision makers in other sectors, about the

contribution which tourism makes to local livelihoods

and engage them in joint initiatives to increase the

local economic development and poverty reduction

impacts?

• If pro-poor growth and poverty reduction through tourism is to become part of national strategy then it is essential

to engage other national government ministries. This requires that the positive impacts on the local and national

economy and in particular success in achieving poverty reduction targets can be convincingly demonstrated,

measured and reported.

• Tourism is mentioned in some national Poverty Reduction Strategy Papers (PRSPs) but there is li le referencing �

between national tourism policy and the poverty reduction strategies.

THE BUSINESS CASE FOR ENGAGEMENT WITH LOCAL ECONOMIC

DEVELOPMENT AND POVERTY REDUCTION

To prosper the tourism industry needs to operate in environments which remain a ractive to� tourists. The industry

needs a relatively well-educated work force, functioning health systems and relatively good transport, communications,

water and energy infrastructure. These services and facilities are also valuable to local communities.

There are risks and opportunities in the tourism sector which financiers, developers, hoteliers and operators need to

manage. Many of those present felt that tourism does not have to do very much to have a significant impact on household

incomes and livelihoods in a local area. This can amount to a significant national impact if the tourism industry as a

whole adopted international best practice.

There is an increasingly strong business case for the investors and developers, hoteliers and resort owners and tour

operators to address these issues. The trend towards higher expectations of Corporate Responsibility (CR) performance

from increasing numbers of consumers and investors will not pass the travel and tourism industry by.

The ways that businesses do their business will determine the extent to which they contribute to the generation of local

economic development and the reduction of poverty. Where businesses act together they are able to reduce transaction

costs and secure more significant impacts than they would be able to achieve individually and improve the business

environment; by adopting common standards across a shared platform, with appropriate compliance guidelines and

verification, they can ensure a relatively level playing field and reduce the risk of legislation and regulatory intervention

by national or local authorities.5

Tourism and Local Economic Development

Minimising Risk

Business has been using tools to manage

environmental risk for some time. There is now

increasing emphasis on the economic and social

aspects of the triple bo om line of business. Brand �

image and value are key elements for an industry

where the product is intangible at the point of

purchase and where the experience is much more than

the directly purchased transport, accommodation

and guide services. Reputational risk is a significant

issue in an industry that is highly competitive and

differentiated; and where the product purchased by

the consumer extends beyond what is owned and

directly managed in the supply chain.

Licence to Operate

Good relationships with local communities, positive

recognition of demonstrable concern for the natural

and cultural environment and the maximisation of

the contribution which the industry makes to local

livelihoods, economic development and the reduction

of poverty are all important to the industry’s licence

to operate. Enterprises, particularly where they

collaborate to achieve local economic development,

can improve the general environment for business

and enable them to stay ahead of legislation.

Resentful communities can make it significantly

more expensive for the industry to operate and

reduce the quality of the experience.

Market Advantage

Extending responsible business practices beyond

the environmental agenda to address the economic

and social aspects builds reputation, particularly for

those companies that establish a leadership role. The

market is changing to reflect socially, environmentally

and culturally aware holidaymakers. These market

trends require a richer experience, generally beyond

the confines of the hotel or resort. There is market

advantage and repeat business to be secured by

enabling clients to enrich their experience and this

will increase the local economic benefit.

Product Quality and Cost

In an increasingly differentiated and competitive

market there is commercial advantage in operating

in, and to, destinations which offer a rich mixture

of experiences and activities. The traditional

provision of resort activities increasingly needs to

be supplemented with complementary products

many of which will be locally owned and provided

by SMEs. Businesses benefit where collectively

their efforts create a larger range of opportunities

for local sourcing and a larger pool of labour with

appropriate skills from which they can recruit. Cooperation between businesses makes the strategy

easier to achieve, reduces cost and avoids the

freeloader problem.

Staff Morale

Changing consumer a itudes towards what �

constitutes a good holiday experiences and the

relevance of the CR agenda also applies to staff.

Adopting a more responsible business agenda can

assist with the recruitment, motivation and retention

of quality staff and reduce costs.

Benefits of a CR Approach to Stimulating Local Economic Development6 Tourism and Local Economic Development

Many leading commercial banks

have adopted the Equator Principles

which are intended to provide a

common framework (benchmarked

against World Bank group criteria) for

commercial lenders. It is intended that

the Equator Principles should become

an important element of lender due

diligence and borrower compliance

and that the principles will become

part of the project management

process and extend over the lifecycle

of a development.

The benefits for developers, seeking

commercial finance, of compliance

with the Equator Principles may be

expected to include more favourable

repayment terms and less intrusive

covenants in loan agreements as

banks lend more selectively in order to

minimise their risk. For investors and

financial institutions the issues of risk

management are no less significant,

the repayment of, and return on,

their investments is dependent upon

the licence to operate, successful risk

management and market advantage of

the borrower. By adopting a proactive

approach through the Equator

Principles they can manage portfolio

volatility and increase returns.

Where developers and investors are

proactive in minimising negative

environmental, social and economic

impacts and maximising the positive

impacts they have a competitive

advantage in securing planning

permissions or licenses and in bidding

for development contracts.

Different considerations apply in

the design and construction phases

and in the operational phases of

a project. Developers are likely to

focus on securing construction and

development contracts and financial

institutions are o en partners in �

this process. Their joint focus is on

the development and construction

phase, but as hoteliers point out,

their capacity to adopt a CR approach

in the operational phase is, to a

significant degree, dependent upon

decisions made in siting, design

and construction. Hotel and resort

management companies o en �

have li le or no influence at that �

stage and subsequent retrofi ing to �

comply with regulatory frameworks,

insurance requirements and industry

best practices, as they develop over

the lifecycle of the development, is

expensive. Risk needs to be managed

over the project lifecycle as a whole.

The licence to operate, risk

management and commercial

advantage are key considerations for

developers and their funders. The

International Finance Corporation has

developed Tourism and Hospitality

Development guidelines which apply

to developments which it finances.

Whilst the agenda has been

dominated by risk management

there are commercial advantages for

developers, construction companies

and banks. In winning licenses

and construction contracts there is

commercial advantage in being able

to demonstrate not just low levels

of negative environmental and

socio-cultural impacts but enhanced

positive economic and social impacts.

This can be achieved through the

creation of additional employment

and SME opportunities for local

communities by adopting strategies

and development plans maximizing

the local economic development and

poverty impacts whilst minimizing

negative livelihood impacts.

The additional investment and

partnering, mentoring and

transaction costs associated with a

broader approach to local economic

development are likely to be small

in comparison to the commercial

advantage which comes from

enhancing the economic impacts,

particularly in countries with high

INVESTORS AND DEVELOPERS

Risk management has focussed primarily on the environment in

hotel construction but there are significant social and economic

risks that are increasingly the focus of community, NGO, IGO

and national and local government concerns.

levels of youth unemployment. By

engaging with local communities

in tourism development projects

and demonstrating both willingness

and acumen in maximising the local

economic benefits developers secure

their licence to operate and create

a be er business environment for �

the hotel and resort management

companies, with a richer product offer

in the neighbourhood.

Local sourcing and maintenance

requires the development of a range

of local enterprises which will benefit

the development and the local

economy by providing employment,

local enterprise opportunities and

supplies of goods and services which

benefit the local community as well

as the tourism development. The

development of this strategy requires

that both local sourcing and market

access issues are addressed in the

design and development phases.

If the approach is to be credible the

local economic benefits need to be

clearly specified, targets need to be

set and the deliverables monitored.

Processes like community labour

agreements and established economic

impact measurements including the

measurement of local sourcing and job

creation can be used for this purpose.

Local communities can o en, but not �

always, gain from the infrastructure

that comes to their area as a result

of tourism development. Companies

will increasingly be challenged to

report on these benefits – all of which

contribute to risk management and

ensuring the licence to operate.

“The licence to operate, risk management and commercial advantage are key considerations for developers and their funders.”7

Tourism and Local Economic Development

Risk management and the licence

to operate require that hotels and

resorts maintain good relationships

with their “neighbourhood” and

return a profit to the owners. The

hotel sector moved earlier than other

travel and tourism industry sectors to

adopt and implement environmental

management principles and there are

many examples of local initiatives

around hotels and resorts that

are designed to address issues of

economic and social sustainability.

The experiments and local initiatives

need now to be scaled up and applied

more widely.

Hotels and resorts are to a significant

degree dependent upon the

maintenance and development of the

environment in which they operate.

Hotels and reports have an obvious and

real interest in their neighbourhood

for risk management and product

quality reasons – the hotel or resort is

commi ed to the local area, it cannot �

just move on if the environment is

ruined or the neighbourhood becomes

una ractive. �

The managers of hotels and resorts

have a long-term interest in the

maintenance and enrichment of

the locality, to “create be er places �

for people to live in and for people

to visit.” If the destination value

declines so, generally, does the value

and profitability of the property;

contributing to the development of the

destination enables the hotel or resort

to manage risk, increase product

quality and secure commercial

advantage. There are direct

commercial benefits in extending the

season, increasing bed occupancy,

filling beds out of season through a

festival and extending length of stay.

Improving the destination can assist

in achieving all of these commercial

objectives.

Hotels and resorts can achieve a

considerable amount by acting

separately, however, destinations

are o en composed by a variety �

of properties serving different

market segments and with different

management strategies and the sector

is very vulnerable to those who whilst

they benefit from initiatives do not

contribute to them. At the destination

level there are benefits from

collaborative action by hotels and

resorts working with local authorities

and communities and with the wider

local industry.

Local Sourcing

Local economic development and

the reduction of poverty is achieved

where hotels and resorts:

• maximise their employment

of local labour and through

management and training

interventions, by investing

in people and ensuring that

increasingly senior posts go to

local employees;

• work with local communities

and micro enterprises to ensure

supplies of food and beverages,

so furnishings, maintenance, �

arts and cra s and entertainment. �

are locally sourced.

The development of local linkages of

these sorts requires that the challenges

of quality, quantity and continuity of

supply at a fair market price are met.

Complementary Products

• Hotels and resorts can contribute

and secure commercial

advantage by working with

local communities and SMEs

to encourage the development

of the diversity of local tourism

services and products.

• Hotels and resorts can contribute

to this destination enrichment

by providing market access for

the communities and microenterprises that can provide these

goods and services. Commercial

advantage and risk management

favour cooperation.

• In adopting these approaches

the hotel or resort is encouraging

their clients to spend money

in the local economy on

complementary products

by providing market access.

Traditionally hotels and resorts

have done this by entering

into contracts with the local

formal sector industry. There

is commercial advantage to be

gained by widening the range of

goods and services available to

guests and in the process a far

more significant contribution can

be made to the local economy by

enhancing market access.

HOTELS AND RESORTS 8 Tourism and Local Economic Development

TOUR OPERATORS

Although some tour operators

specialise in particular destinations,

the majority of operators, including

the specialists, are multi-destination.

Tour operators have established

relationships with local suppliers;

particularly their inbound operator

in the destination. Their ability to sell

trips is very reliant upon the perceived,

and actual quality, of the destination.

Tour operators are reliant on the

quality and safety of the destination,

they also play a significant role in

shaping the way the destination

is perceived by the way that they

market the location. Many operators

are responding to changing market

trends in the UK by placing increasing

emphasis on locally sourced services,

food and drinks, richer excursion and

activity programmes.

Tour operators seek market advantage through the quality of the

experiences which they offer and that o en necessitates close �

engagement with local communities and micro enterprises. Increasing

numbers of operators are seeking to secure repeat business by

enhancing the quality of the holiday experience in these ways and

securing both increased levels of repeat business and referrals.

Where investors and developers, hotel and resort management

companies and managers and tour operators can identify ways of

working together to enhance the quality of the destination, they and

the local community gain.

© The International Centre for Responsible Tourism (Dr Harold Goodwin) and Scott Wilson Business Consultancy (Stuart Robson and Sam Higton), August 2004.

All rights reserved. No part of this publication may be reproduced without the written permission of the copyright owners. Authors welcome the distribution

and use of this document in original format by business organisations, Government and Educational establishments.

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Economic impacts of Tourism Page # 1

Economic Impacts of Tourism

Daniel J. Stynes

Businesses and public organizations are increasingly interested in the economic impacts of tourism at

national, state, and local levels. One regularly hears claims that tourism supports X jobs in an area or that a festival

or special event generated Y million dollars in sales or income in a community. “Multiplier effects” are often cited

to capture secondary effects of tourism spending and show the wide range of sectors in a community that may

benefit from tourism.

Tourism’s economic benefits are touted by the industry for a variety of reasons. Claims of tourism’s

economic significance give the industry greater respect among the business community, public officials, and the

public in general. This often translates into decisions or public policies that are favorable to tourism. Community

support is important for tourism, as it is an activity that affects the entire community. Tourism businesses depend

extensively on each other as well as on other businesses, government and residents of the local community.

Economic benefits and costs of tourism reach virtually everyone in the region in one way or another. Economic

impact analyses provide tangible estimates of these economic interdependencies and a better understanding of the

role and importance of tourism in a region’s economy.

Tourism activity also involves economic costs, including the direct costs incurred by tourism businesses,

government costs for infrastructure to better serve tourists, as well as congestion and related costs borne by

individuals in the community. Community decisions over tourism often involve debates between industry

proponents touting tourism’s economic impacts (benefits) and detractors emphasizing tourism’s costs. Sound

decisions rest on a balanced and objective assessment of both benefits and costs and an understanding of who

benefits from tourism and who pays for it.

Tourism’s economic impacts are therefore an important consideration in state, regional and community

planning and economic development. Economic impacts are also important factors in marketing and management

decisions. Communities therefore need to understand the relative importance of tourism to their region, including

tourism’s contribution to economic activity in the area.

A variety of methods, ranging from pure guesswork to complex mathematical models, are used to

estimate tourism’s economic impacts. Studies vary extensively in quality and accuracy, as well as which aspects of

tourism are included. Technical reports often are filled with economic terms and methods that non-economists do

not understand. On the other hand, media coverage of these studies tend to oversimplify and frequently

misinterpret the results, leaving decision makers and the general public with a sometimes distorted and incomplete

understanding of tourism’s economic effects.

How can the average person understand these studies sufficiently to separate good studies from bad ones

and make informed choices? The purpose of this bulletin is to present a systematic introduction to economic impact

concepts and methods. The presentation is written for tourism industry analysts and public officials, who would

like to better understand, evaluate, or possibly conduct an economic impact assessment. The bulletin is organized

around ten basic questions that either are asked or should be asked about the economic impacts of tourism.

Ten Questions About the Economic Impacts of Tourism

1. What is an economic impact analysis?

2. What questions does an economic impact assessment answer?

3. What economic impacts does tourism have?

4. What are multiplier effects?

5. How are tourism’s economic impacts measured?

6. What are the typical approaches for an economic impact assessment?

7. What are some examples of economic impact assessment approaches in tourism?

8. What are the steps for conducting a tourism economic impact study?

9. What are some questions to ask when evaluating or interpreting a tourism economic impact study?

10. What will an economic impact study cost?Economic impacts of Tourism Page # 2

1. What is an economic impact analysis?

A variety of economic analyses are carried out to support tourism decisions. As these different kinds of

economic analysis are frequently confused, let’s begin by positioning economic impact studies within the

broader set of economic problems and techniques relevant to tourism. These same techniques may be applied

to any policy or action, but we will define them here in the context of tourism. Each type of analysis is

identified by the basic question(s) it answers and the types of methods and models that are appropriate.

TYPES OF ECONOMIC ANALYSIS

Economic impact analysis -- What is the contribution of tourism activity to the economy of the region? An

economic impact analysis traces the flows of spending associated with tourism activity in a region to

identify changes in sales, tax revenues, income, and jobs due to tourism activity. The principal methods

here are visitor spending surveys, analysis of secondary data from government economic statistics,

economic base models, input-output models and multipliers. (Frechtling 1994a)

Fiscal impact analysis – Will government revenues from tourism activity from taxes, direct fees, and other

sources cover the added costs for infrastructure and government services? Fiscal impact analysis

identifies changes in demands for government utilities and services resulting from some action and

estimates the revenues and costs to local government to provide these services (Burchell and Listokin

1978).

Financial analysis – Can we make a profit from this activity? A financial analysis determines whether a

business will generate sufficient revenues to cover its costs and make a reasonable profit. It generally

includes a short-term analysis of the availability and costs of start-up capital as well as a longer-range

analysis of debt service, operating costs and revenues. A financial analysis for a private business is

analogous to a fiscal impact analysis for a local government unit.

Demand analysis – How will the number or types of tourists to the area change due to changes in prices,

promotion, competition, quality and quantity of facilities, or other demand shifters? A demand

analysis estimates or predicts the number and/or types of visitors to an area via a use estimation, forecasting

or demand model. The number of visitors or sales is generally predicted based on judgement (Delphi

method), historic trends (time series methods), or using a model that captures how visits or spending varies

with key demand determinants (structural models) such as population size, distance to markets, income

levels, and measures of quality & competition (Walsh 1986, Johnson and Thomas 1992).

Benefit Cost analysis (B/C) – Which alternative policy will generate the highest net benefit to society over

time? A B/C analysis estimates the relative economic efficiency of alternative policies by comparing

benefits and costs over time. B/C analysis identifies the most efficient policies from the perspective of

societal welfare, generally including both monetary and non-monetary values. B/C analysis makes use of a

wide range of methods for estimating values of non-market goods and services, such as the travel cost

method and contingent valuation method (Stokey and Zeckhauser 1978; Sudgen and Williams 1978 ).

Feasibility study – Can/should this project or policy be undertaken? A feasibility study determines the

feasibility of undertaking a given action to include political, physical, social, and economic feasibility. The

economic aspects of a feasibility study typically involve a financial analysis to determine financial

feasibility and a market demand analysis to determine market feasibility. A feasibility study is the private

sector analogue of benefit cost analysis. The feasibility study focuses largely on the benefits and costs to the

individual business or organization, while B/C analysis looks at benefits and costs to society more generally

(Warnell 1986).

Environmental Impact assessment – What are the impacts of an action on the surrounding environment? An

environmental assessment determines the impacts of a proposed action on the environment, generally

including changes in social, cultural, economic, biological, physical, and ecological systems. Economic

impact assessment methods are often used along with corresponding measures and models for assessing

social, cultural and environmental impacts. Methods range from simple checklists to elaborate simulation

models (Williams, 1994).Economic impacts of Tourism Page # 3

Benefit cost analysis and economic impact analysis are frequently confused as both discuss economic

"benefits". There are two clear distinctions between the two techniques. B/C analysis addresses the benefits from

economic efficiency while economic impact analysis focuses on the regional distribution of economic activity. The

income received from tourism by a destination region is largely off-set by corresponding losses in the origin

regions, yielding only modest contributions to net social welfare and efficiency. B/C analysis includes both market

and non-market values (consumer surplus), while economic impact analysis is restricted to actual flows of money

from market transactions.

While each type of economic analysis is somewhat distinct, a given problem often calls for several

different kinds of economic analysis. An economic impact study will frequently involve a demand analysis to

project levels of tourism activity. In other cases demand is treated as exogenous and the analysis simply estimates

impacts if a given number of visitors are attracted to the area. A comprehensive impact assessment will also

examine fiscal impacts, as well as social and environmental impacts.

Be aware that an economic impact analysis, by itself, provides a rather narrow and often one-sided

perspective on the impacts of tourism. Studies of the economic impacts of tourism tend to emphasize the positive

benefits of tourism. On the other hand environmental, social, cultural and fiscal impact studies tend to focus more

on negative impacts of tourism. This is in spite of the fact that there are negative economic impacts of tourism

(e.g., seasonality and lower wage jobs) and in many cases positive environmental and social impacts (e.g.,

protection of natural & cultural resources in the area and education of both tourists and local residents).

An economic impact assessment (EIA) traces changes in economic activity resulting from some action.

An EIA will identify which economic sectors benefit from tourism and estimate resulting changes in income and

employment in the region. Economic impact assessment procedures do not assess economic efficiency and also do

not generally produce estimates of the fiscal costs of an action. For many problems economic impact analysis will

be part of a broader analysis. Environmental, social, and fiscal impacts are often equally important concerns in a

balanced assessment of impacts.

2. What questions does a tourism economic impact study answer?

An economic impact analysis will assess the contribution of tourism activity to a region’s economy. The

basic questions an economic impact study usually addresses are:

· How much do tourists spend in the area?

· What portion of sales by local businesses is due to tourism?

· How much income does tourism generate for households and businesses in the area?

· How many jobs in the area does tourism support?

· How much tax revenue is generated from tourism?

An economic impact analysis also reveals the interrelationships among economic sectors and provides

estimates of the changes that take place in an economy due to some existing or proposed action. The most common

applications of economic impact analysis to tourism are:

· To evaluate the economic impacts of changes in the supply of recreation and tourism opportunities.

Supply changes may involve a change in quantity, such as the opening of new facilities, closing of

existing ones, or expansions and contraction in capacity. Supply changes may also involve changes in

quality, including changes in (a) the quality of the environment, (b) the local infrastructure and public

services to support tourism, or (c) the nature of the tourism products and services that are provided in

an area.

· To evaluate the economic impacts of changes in tourism demand. Population changes, changes in the

competitive position of the region, marketing activity or changing consumer tastes and preferencesEconomic impacts of Tourism Page # 4

can alter levels of tourism activity, spending, and associated economic activity. An economic impact

study can estimate the magnitude and nature of these impacts.

· To evaluate the effects of policies and actions which affect tourism activity either directly or

indirectly. Tourism depends on many factors at both origins and destinations that are frequently

outside the direct control of the tourism industry itself. Economic impact studies provide information

to help decision makers better understand the consequences of various actions on the tourism industry

as well as on other sectors of the economy. For example, increased air pollution standards have been

opposed in some regions due to the predicted economic consequences of the closing of plants that

cannot meet the new standards. Tourism interests counter these arguments with estimates of the

potential gains in income and jobs in tourism industries that depend on good air quality and visibility.

· To understand the economic structure and interdependencies of different sectors of the economy.

Economic studies help us better understand the size and structure of the tourism industry in a given

region and its linkages to other sectors of the economy. Such understandings are helpful in

identifying potential partners for the tourism industry as well as in targeting industries as part of

regional economic development strategies. Issues such as economic growth, stability, and seasonality

may be addressed as part of these studies.

· To argue for favorable treatment in allocation of resources or local tax, zoning or other policy

decisions. By showing that tourism has significant economic impacts, tourism interests can often

convince decision-makers to allocate more resources for tourism or to establish policies that

encourage tourism. Tax abatements and other incentives frequently given to manufacturing firms

have also been granted to hotels, marinas and other tourism businesses based on demonstrated

economic impacts in the local area.

· To compare the economic impacts of alternative resource allocation, policy, management or

development proposals. Economic impact analyses are commonly used to assess the relative merits of

distinct alternatives. The economic contribution of expanded tourism offerings may be compared for

example with alternatives such as resource extraction activities (mining, timber harvesting) or

manufacturing. Impacts of alternative tourism development proposals may also be evaluated, e.g.,

tourism strategies that emphasize outdoor recreation, camping development, a convention facility, or

a factory outlet mall.

3. What economic impacts does tourism have?

Tourism has a variety of economic impacts. Tourists contribute to sales, profits, jobs, tax revenues, and

income in an area. The most direct effects occur within the primary tourism sectors --lodging, restaurants,

transportation, amusements, and retail trade . Through secondary effects, tourism affects most sectors of the

economy. An economic impact analysis of tourism activity normally focuses on changes in sales, income, and

employment in a region resulting from tourism activity.

A simple tourism impact scenario illustrates. Let’s say a region attracts an additional 100 tourists, each

spending $100 per day. That’s $10,000 in new spending per day in the area. If sustained over a 100 day season, the

region would accumulate a million dollars in new sales. The million dollars in spending would be distributed to

lodging, restaurant, amusement and retail trade sectors in proportion to how the visitor spends the $100. Perhaps

30% of the million dollars would leak out of the region immediately to cover the costs of goods purchased by

tourists that are not made in the local area (only the retail margins for such items should normally be included as

direct sales effects). The remaining $700,000 in direct sales might yield $350,000 in income within tourism

industries and support 20 direct tourism jobs. Tourism industries are labor and income intensive, translating a high

proportion of sales into income and corresponding jobs.Economic impacts of Tourism Page # 5

The tourism industry, in turn, buys goods and services from other businesses in the area, and pays out

most of the $350,000 in income as wages and salaries to its employees. This creates secondary economic effects in

the region. The study might use a sales multiplier of 2.0 to indicate that each dollar of direct sales generates

another dollar in secondary sales in this region. Through multiplier effects, the $700,000 in direct sales produces

$1.4 million in total sales. These secondary sales create additional income and employment, resulting in a total

impact on the region of $1.4 million in sales, $650,000 in income and 35 jobs. While hypothetical, the numbers

used here are fairly typical of what one might find in a tourism economic impact study. A more complete study

might identify which sectors receive the direct and secondary effects and possibly identify differences in spending

and impacts of distinct subgroups of tourists (market segments). One can also estimate the tax effects of this

spending by applying local tax rates to the appropriate changes in sales or income. Instead of focusing on visitor

spending, one could also estimate impacts of construction or government activity associated with tourism.

There are several other categories of economic impacts that are not typically covered in economic impact

assessments, at least not directly. For example:

· Changes in prices -- tourism can sometimes inflate the cost of housing and retail prices in the area,

frequently on a seasonal basis.

· Changes in the quality and quantity of goods and services – tourism may lead to a wider array of

goods and services available in an area (of either higher or lower quality than without tourism).

· Changes in property and other taxes – taxes to cover the cost of local services may be higher or

lower in the presence of tourism activity. In some cases, taxes collected directly or indirectly from

tourists may yield reduced local taxes for schools, roads, etc. In other cases, locals may be taxed

more heavily to cover the added infrastructure and service costs. The impacts of tourism on local

government costs and revenues are addressed more fully in a fiscal impact analysis.

· Economic dimensions of “social” and “environmental” impacts - There are also economic

consequences of most social and environmental impacts that are not usually addressed in an

economic impact analysis. These can be positive or negative. For example, traffic congestion will

increase costs of moving around for both households and businesses. Improved amenities that attract

tourists may also encourage retirees or other kinds of businesses to locate in the area.

Direct, Indirect and Induced Effects

A standard economic impact analysis traces flows of money from tourism spending, first to businesses and

government agencies where tourists spend their money and then to :

· other businesses -- supplying goods and services to tourist businesses,

· households – earning income by working in tourism or supporting industries, and

· government -- through various taxes and charges on tourists, businesses and households

Formally, regional economists distinguish direct, indirect, and induced economic effects. Indirect and

induced effects are sometimes collectively called secondary effects. The total economic impact of tourism is the

sum of direct, indirect, and induced effects within a region. Any of these impacts may be measured as gross output

or sales, income, employment, or value added. See the glossary for definitions of these terms.

Direct effects are production changes associated with the immediate effects of changes in tourism .

expenditures. For example, an increase in the number of tourists staying overnight in hotels would directly yield

increased sales in the hotel sector. The additional hotel sales and associated changes in hotel payments for wages

and salaries, taxes, and supplies and services are direct effects of the tourist spending.

Indirect effects are the production changes resulting from various rounds of re-spending of the hotel

industry's receipts in other backward-linked industries (i.e., industries supplying products and services to hotels).

Changes in sales, jobs, and income in the linen supply industry, for example, represent indirect effects of changes

in hotel sales. Businesses supplying products and services to the linen supply industry represent another round of

indirect effects, eventually linking hotels to varying degrees to many other economic sectors in the region.Economic impacts of Tourism Page # 6

Induced effects are the changes in economic activity resulting from household spending of income earned

directly or indirectly as a result of tourism spending. For example, hotel and linen supply employees, supported

directly or indirectly by tourism, spend their income in the local region for housing, food, transportation, and the

usual array of household product and service needs. The sales, income, and jobs that result from household

spending of added wage, salary, or proprietor’s income are induced effects.

By means of indirect and induced effects, changes in tourist spending can impact virtually every sector of

the economy in one way or another. The magnitude of secondary effects depends on the propensity of businesses

and households in the region to purchase goods and services from local suppliers. Induced effects are particularly

noticed when a large employer in a region closes a plant. Not only are supporting industries (indirect effects) hurt,

but the entire local economy suffers due to the reduction in household income within the region. Retail stores close

and leakages of money from the region increase as consumers go outside the region for more and more goods and

services. Similar effects in the opposite direction are observed when there is a significant increase in jobs and

household income.

Final demand is the term used by economists for sales to the final consumers of goods and services. In

almost all cases, the final consumers of tourism goods and services are households. Government spending is also

considered as final demand. The same methods for estimating impacts of visitor spending can be applied to

estimate the economic impacts of government spending, for example, to operate and maintain a park or visitor

center.

Regional economic models

An input-output model (I-O model) is a mathematical model that describes the flows of money between

sectors within a region’s economy. Flows are predicted by knowing what each industry must buy from every other

industry to produce a dollar’s worth of output. Using each industry’s production function, I-O models also

determine the proportions of sales that go to wage and salary income, proprietor’s income, and taxes. Multipliers

can be estimated from input-output models based on the estimated re-circulation of spending within the region.

Exports and imports are determined based upon estimates of the propensity of households and firms within the

region to purchase goods and services from local sources (often called RPC’s or regional purchase coefficients).

The more a region is self-sufficient and purchases goods and services from within the region, the higher the

multipliers for the region.

Input-output models make a number of assumptions. The basic ones are that:

· All firms in a given industry employ the same production technology (usually assumed to be the national

average for that industry), and produce identical products.

· There are no economies or diseconomies of scale in production or factor substitution. I-O models are

essentially linear –- double the level of tourism activity/production and you double all of the inputs, the

number of jobs, etc.

· The model doesn’t explicitly keep track of time, but analysts generally report the impact estimates as if

they represent activity within a single year.

· One must assume that the various model parameters are accurate and represent the current year.

I-O models are firmly grounded in the national system of accounts, which relies on a standard industrial

classification system (SIC codes) and various federal government economic censuses, in which individual

firms report sales, wage and salary payments and employment. I-O models will generally be at least a few

years out-of-date, although this isn’t usually a major problem unless the region’s economy has changed

significantly. An I-O model represents the region’s economy at a particular point in time. Tourist

spending estimates are generally price adjusted to the year of the model.

· Multiplier computations for induced effects generally assume that jobs created by additional spending are

new jobs, involving new households in the area. Induced effects are computed assuming linear changes in

household spending with changes in income. Estimates of induced effects may be inflated due to the

violation of these assumptions. Induced effects tend to account for the vast majority of the secondary

effects of tourism, and therefore should be used with caution.Economic impacts of Tourism Page # 7

4. What are multipliers and multiplier effects of tourism?

Multipliers capture the secondary economic effects (indirect and induced) of tourism activity. Multipliers

have been frequently misused and misinterpreted in tourism studies (Archer 1984) and are a considerable source of

confusion among non-economists. Multipliers represent the economic interdependencies between sectors within a

particular region’s economy. They vary considerably from region to region and sector to sector. There are many

different kinds of multipliers reflecting which secondary effects are included and which measure of economic

activity is used (sales, income, or employment).

For example,

The Type I sales multiplier = direct sales + indirect sales

direct sales.

The Type II or III sales multiplier

1

= direct sales + indirect sales + induced sales

direct sales.

Multiplying a Type I sales multiplier times the direct sales gives direct plus indirect sales. Multiplying a

Type II or III sales multiplier times the direct sales gives total sales impacts including direct, indirect and induced

effects. The multipliers defined above are called ratio type multipliers as they measure the ratio of a total impact

measure to the corresponding direct impact. Comparable income and employment ratio type multipliers may be

defined by replacing sales with measures of income or employment in the above equations. Ratio multipliers should

be used with caution.

A common error is to multiply a sales multiplier times tourist spending to get total sales effects. This will

generate an inflated estimate of tourism impacts. The problem is that tourism spending or sales is not exactly the

same as the “direct effects”, appearing in the multiplier formula. Tourist purchases of goods (vs. services) are the

primary source of the problem.

To properly apply tourist purchases of goods to an input-output model (or corresponding multipliers),

various margins (retail, wholesale and transportation) must be deducted from the “purchaser price” of the good to

separate out the “producer price”. In an I-O model, retail margins accrue to the retail trade sector, wholesale

margins to wholesale trade, transportation margins to transportation sectors (trucking, rail, air etc.) and the

producer prices of goods are assigned to the sector that produces the good.

In most cases the factory that produces the good bought by a tourist lies outside of the local region,

creating an immediate “leakage” in the first round of spending and therefore no local impact from production of

the good. Before applying a multiplier to tourist spending, one must first deduct the producer prices of all imported

goods that tourists buy (i.e. only include the local retail margins and possibly wholesale and transportation margins

if these firms lie within the region). Generally, only 60 to 70% of tourist spending appears as final demand in a

local region. While all tourist purchases of services will accrue to the local region as final demand , only the

margins on goods purchased at retail stores should be counted as local final demand. The ratio of local final

demand to tourist spending is called the capture rate.

Capture rate = local final demand / tourism spending in local area

1

. The distinction between Type II and Type III multipliers involves a technical difference in how the induced

effects are computed. Type II approaches include households as a sector of the economy and invert the technical

coefficient matrix including the household sector, while Type III approaches treat households as exogenous.Economic impacts of Tourism Page # 8

Capture rates, like multipliers, will vary with the size and nature of the region as well as the kind of tourist

spending included. One must therefore be cautious in taking a multiplier or capture rate cited in one study and

using it in another.

Another way of calculating a multiplier (generally the preferred approach among economists) is as a ratio

of income or employment to sales. This kind of multiplier is sometimes called a Keynesian multiplier or response

coefficient.

Type III Income multiplier = Total direct, indirect, and induced income

direct sales

Type III Employment multiplier = Total direct, indirect, and induced employment

direct sales

This income (employment) multiplier produces total income (employment) impacts when multiplied by the direct

sales. One must still be careful in distinguishing between tourism spending/sales and direct sales effects. Some

studies may embed the capture rate in the multiplier, expressing the ratio in terms of tourism spending rather than

direct sales.

5. How are tourism’s economic impacts measured?

The economic impacts of tourism are typically estimated by some variation of the following simple

formula:

Economic Impact of Tourism = Number of Tourists * Average Spending per Visitor * Multiplier

The formula suggests three distinct steps and corresponding measurements or models:

(1) Estimate the change in the number and types of tourists to the region due to the proposed policy

or action.

Estimates or projections of tourist activity generally come from a demand model or some system for

measuring levels of tourism activity in an area. Economic impact estimates will rest heavily on good estimates of

the numbers and types of visitors. These must come from carefully designed measurements of tourist activity, a

good demand model, or good judgement. This step is usually the weakest link in most tourism impact studies, as

few regions have accurate counts of tourists, let alone good models for predicting changes in tourism activity or

separating local visitors from visitors from outside the region.

(2) Estimate average levels of spending (often within specific market segments) of tourists in the

local area.

Spending averages come from sample surveys or are sometimes borrowed or adapted from other studies.

Spending estimates must be based on a representative sample of the population of tourists taking into account

variations across seasons, types of tourists, and locations within the study area. As spending can vary widely across

different kinds of tourists, we recommend estimating average spending for a set of key tourist segments based on

samples of at least 50-100 visitors within each tourism segment. Segments should be defined to capture differences

in spending between local residents vs. tourists, day users vs. overnight visitors, type of accommodation (motel,Economic impacts of Tourism Page # 9

campground, seasonal home, with friends and relatives), and type of transportation (car, RV, air, rail, etc.). In

broadly based tourism impact studies, it is useful to identify unique spending patterns of important activity

segments such as downhill skiers, boaters, convention & business travelers.

Multiplying the number of tourists by the average spending per visitor (be careful the units are consistent)

gives an estimate of total tourist spending in the area. Estimates of tourist spending will generally be more accurate

if distinct spending profiles and use estimates are made for key tourism segments. The use and spending estimates

are the two most important parts of an economic impact assessment. When combined, they capture the amount of

money brought into the region by tourists. Multipliers are needed only if one is interested in the secondary effects

of tourism spending.

(3) Apply the change in spending to a regional economic model or set of multipliers to determine

secondary effects.

Secondary effects of tourism are estimated using multipliers or a model of the region’s economy.

Multipliers generally come from an economic base or input-output model of the region’s economy. In many cases

multipliers are borrowed (often improperly) or adjusted from published multipliers or other studies. One should not

take a multiplier estimated for one region and apply it in a region with a quite different economic structure.

Generally, multipliers are higher for larger regions with more diversified economies and lower for smaller regions

with more limited economic development. A common error is to apply a statewide multiplier (since these are more

widely published) to a local region. This will yield inflated estimates of local multiplier effects.

Multipliers can also be used to convert estimates of spending or sales to income and employment. Simple

ratios can be used to capture how much income or jobs are generated per dollar of sales. These ratios will vary

from region to region and across individual economic sectors due to the relative importance of labor inputs in each

industry and different wage and salary rates in different regions of the country. Be aware that job estimates are

generally not full time equivalents, making them difficult to compare across industries with different proportions of

seasonal and part time jobs. Income or value added

2

are generally the preferred measures of the contribution of

tourism to a region’s economy.

6. What are the typical approaches for an economic impact assessment?

At the simple, “quick and dirty” end of the spectrum are highly aggregate approaches that rely mostly on

judgement to determine tourism activity, spending and multipliers. Such estimates can be completed in a couple

hours at little cost and rest largely on the expertise and judgement of the analyst. At the other extreme are studies

that gather primary data from visitor spending studies and apply the spending estimates to formal regional

economic models for the area in question. In between are a wide range of options that employ varying degrees of

judgement, secondary data, primary data, and formal models.

Different levels of detail and corresponding expense (time and money) and accuracy are possible for each

of the three steps -- estimating tourist volume, spending, and multiplier effects. Four typical approaches illustrate

the levels of detail that are possible and the associated methods (see Table 1).

1. Subjective estimates that rely mostly on expert opinion

2. Secondary data in aggregate form, adapting existing estimates to suit the problem

3. Secondary data in disaggregate form, permitting finer adjustment of data to fit the situation

4. Primary data and/or formal models, usually involving visitor surveys and regional economic models.

2

Value added includes wage and salary income, proprietor’s income, rents, profits, and indirect business taxes. It is a common

measure of the net contribution of the industry or region to production (net of costs of the non-labor inputs).Economic impacts of Tourism Page # 10

Table 1. Approaches to Tourism Economic Impact Assessment

Level Tourism Activity Spending Multipliers

1-

Judgem

ent

Expert judgement to estimate

tourism activity

Expert judgement or an

“engineering approach”

3

Expert judgement to estimate

multipliers

2 Existing tourism counts for the

area or total estimates from a

similar area or facility

Use or adjust spending averages

from studies of a similar

area/market

Use or adjust aggregate tourism

spending multipliers from a

similar region/study

3 Estimate tourism activity by

segment or revise estimates by

segment from another area

Adjust spending that is

disaggregated within particular

spending categories & segments

Use sector-specific multipliers

from published sources

4-

Primary

data

Visitor survey to estimate

number of tourists by segment or

a demand model

Survey random sample of visitors

to estimate average spending by

segment & spending category

Use an input-output model of the

region’s economy

One can employ different levels of aggregation in visitor segments, spending categories, multipliers, and

economic sectors to finely tune the data and models to a particular application and also yield more detailed

information about the economic impacts. For example, spending data from previous surveys may be adjusted over

time using consumer price indices (CPI). If spending is itemized in several categories, distinct CPI’s may be used

for food away from home, lodging, or gasoline. If not, an aggregate CPI, which may not reflect the mix of goods

that tourists purchase, must be used. Data for distinct tourism market segments is also valuable in tailoring

secondary data to a particular application. For example, separate estimates of the average spending for day users

and overnight visitors allows one to adjust the spending estimate to reflect a given mix of day users and overnight

visitors.

7. What are some examples of economic impact studies in tourism?

Some examples serve to illustrate the range of possibilities for estimating the economic impacts of

tourism. The following three examples are presented in greater detail in a companion bulletin.

· The National Park Service’s “Money Generation Model “ is a simple fill-in-form for generating

economic impacts. While an extremely simple approach, it captures the essential elements, of an

economic impact analysis. The number of visits, average spending per visitor and an aggregate sales

multiplier are entered on a simple worksheet to generate estimates of the direct and total sales effects

of visitor spending. Sales effects are converted to income and jobs using simple ratios of income to

sales and jobs to sales. Tax effects of visitor spending can also be estimated by applying local tax rates

3

In an engineering approach, one estimates the costs of producing a “trip” by itemizing typical costs for each input - e.g., a

typical overnight visitor party of 4 staying two nights will incur $50 per night for motel room, $20 per person per day for meals,

$10 for half tank of gas, and $50 for souvenirs = total of $320 per party per trip.Economic impacts of Tourism Page # 11

to sales estimates. With sound judgement in choosing the parameters, the MGM model can yield

reasonable ballpark estimates of economic impacts at minimal cost. This approach, however, provides

little detail on spending categories or which sectors of the economy benefit from either direct or

secondary effects. The aggregate nature of the approach also makes it difficult to adjust recommended

spending rates or multipliers to different applications (USDI, National Park Service 1990.).

· The Bureau of Economic Analysis’s (BEA) RIMS II user handbook illustrates how to apply

published multipliers to estimate economic impacts. This approach starts with visitor spending (from

survey or secondary sources) divided into a number of spending categories and makes use of sectorspecific multipliers to estimate the direct and total sales, income and employment effects. Multipliers

from the BEA’s RIMS II models are used to estimate secondary effects. Multipliers are reported for

39 sectors for each state in the second edition of their report (USDC 1992). This method uses margins

to properly account for retail purchases of goods and makes use of disaggregate sector-specific

multipliers for each state. Multipliers for sub-state regions are not as readily available, but can be

acquired from BEA or other sources. Secondary effects cannot be disaggregated to individual sectors

using the BEA approach. (USDC, BEA 1992).

· The MI-REC/IMPLAN System. Stynes and Propst have developed a fairly complete microcomputer-based system for estimating economic impacts of recreation and tourism. The system

combines spreadsheets for estimating spending with the IMPLAN input-output modeling system.

IMPLAN uses county level data to estimate 528 sector input-output models for regions down to a

county level. IMPLAN generates a complete set of economic accounts for the region including

multipliers and trade flows. MI-REC spreadsheets estimate visitor spending within up to 33

categories based on the number and types of visitors attracted to an area. Spending is then bridged to

the IMPLAN model sectors to estimate direct, indirect and induced effects in terms of sales, income

and employment. Users may estimate spending via visitor surveys or use the MI-REC database of

spending profiles, compiled from previous studies. The system also includes price indices to easily

update spending data to a current year (Stynes and Propst 1992, 1996).

Two other systems for estimating economic impacts of tourism should be noted. The TEIM or Travel

Economic Impact Model developed by the U.S. Travel Data Center (USTDC, 1997) has been widely used to

estimate tourism and travel impacts at state and national levels. A more recent development is the satellite

accounting approach developed by the World Travel and Tourism Council (WTTC 1996). Both of these systems

are primarily designed for estimating the overall economic significance of tourism at national or state levels. They

are not readily applied to estimate the impacts of particular policies and actions at the local level.

The TEIM relies on national travel surveys to estimate trip volume and spending on a state-by-state basis.

Local estimates of impacts are obtained using simple allocation formulas to distribute statewide impacts to counties

and cities within the state. These local estimates do not account very well for the distinct types of tourism activity

or spending patterns in different sub-regions of a state. See Frechtling (1994b) for a summary of the TEIM model.

The WTTC effort also focuses on national and statewide accounting of tourism’s economic significance.

Their satellite tourism account identifies the contribution of travel and tourism to gross national product (GNP) or

gross state product (GSP). Using the standard national system of accounts, they identify the portion of sales, taxes

and investment attributable directly to travel and tourism. The WTTC system does not use multipliers or attempt to

estimate secondary effects. It does, however, capture a great deal of travel-related economic activity, not covered by

visitor trip spending, such as durable goods purchases (boats and RV’s), construction and investment in tourism,

and government expenditures.Economic impacts of Tourism Page # 12

8. What are the steps for conducting a tourism economic impact study?

An economic impact study involves four basic steps:

Step 1: Define the problem

Step 2: Estimate the change in final demand (tourism spending).

Step 3: Estimate the regional economic effects of this change

Step 4: Interpret, apply, and communicate the results

Procedures for carrying out steps 2 and 3 are outlined under question 6 (above) and illustrated in more detail in the

companion report. This bulletin provides background on economic impact concepts and methods to help users of

such studies in interpreting and applying the results. We therefore focus on the key elements to consider in

defining problems for an economic impact analysis.

The most important part of any study is the first step -- clarifying the nature of the problem being

addressed and intended uses of the results. Before launching an economic impact study, be sure this is the kind of

study that is needed rather than one or more of the other kinds of economic analyses summarized in question 1.

Stynes and Propst (1996) identify seven factors that should be specified as part of defining a problem for an

economic impact assessment:

1. Define the action to be evaluated. Begin by clarifying the action or actions involved in the problem.

Actions may include construction, government investment, changes in marketing, management, or

policies, or changes in the quality or quantity of tourist facilities. If evaluating impacts of existing

tourism activity, be sure to define what is to be included as “tourism”.

2. Identify the change in the amount and kinds of recreation/tourism activity resulting from the

action. The action must be defined precisely enough in step one to be able to estimate the changes in

the number and types of visitors to the area and/or their spending patterns. As a general rule, the

analysis should be with vs. without the action rather than simply before vs. after. Thus, if tourism

has been growing by 5% per year and a new promotional program increases this to 10% this year,

only half of the 10% growth can likely be attributed to the promotional program. Identifying the net

changes in activity that are attributable to an action can be a complex and difficult task. Assessments

of economic impact, however, rest firmly on such estimates, so attention to these details is very

important. In situations of some uncertainty, we recommend evaluating impacts using a range of

estimates in order to establish rough confidence intervals around your estimates. Evaluating a range

of alternatives also helps to evaluate the sensitivity of the results to your initial estimates of changes

in activity levels.

3. Identify the kinds of spending to be included. Tourism may impact the local economy through

visitor trip spending, durable goods purchases, government spending, or investment and

construction. Which to include in a given analysis depends on how the problem is defined, and

again, on attributing given spending changes to the proposed action.

4. Identify the study region. Perhaps the most important, yet often neglected part of a recreation and

tourism impact assessment is the definition of a study region. The region defines the area for which

impacts are desired, as well as the portions of visitor spending that are relevant. An impact

assessment evaluates the impacts on households, businesses, and organizations within the given

region. Spending that visitors make outside of a study region either at home or enroute are not

included in assessing impacts of spending on the designated region. For an economic impact

analysis, the study region should be large enough to constitute a viable economic region. Since little

economic data exists below the county level, the county is generally the smallest region one should

consider for a tourism impact assessment.Economic impacts of Tourism Page # 13

5. Identify key economic sectors and desired sectoral detail. The proposed action and anticipated

uses/users of the results should suggest the key sectors that will be impacted. Recreation and tourism

activity typically impact the lodging, restaurant, amusements, retail, transportation and government

sectors most directly. In the problem definition stage consideration of impacted sectors helps to

identify relevant categories of spending. The desired sectoral detail plays an important role in

structuring the presentation of results. In some cases only an aggregate measure of impacts may be

desired. In other cases, clients may be interested in which particular sectors are most heavily affected

and will want estimates of sales and jobs broken down by sector. If formal input-output models are

used, impacts may be estimated in considerable sectoral detail. This is not possible if an aggregate

spending estimate or multiplier is used.

6. Identify the most important measures of economic activity. Tourism impacts may be reported in

terms of visitor spending, business receipts/sales/production, wage and salary income, proprietors

income and profits, value added, and employment. The direct effects are the most important and are

captured well by estimates of visitor spending. Simple ratios can be used to convert direct spending

or sales to the associated income and jobs. Input-output models and multipliers are needed only if

one is interested in secondary effects.

7. Identify the tolerable levels of error in the results. Although confidence intervals and estimates of

error are rare in economic impact studies, this doesn't mean they are not important. You should have

at least a ballpark idea of how much error you can tolerate in the analysis, as this will dictate how

much effort and expense you must put into it. The more accuracy you demand, the greater the

requirements to gather up-to-date local data on visitation, spending and economic activity. These

data allow you to fine tune the spending estimates and input-output models or multipliers. Such fine

tuning will require time, knowledge, and money that must be weighed against the benefits of the

improved estimates. Estimates of impacts are based on three components: visits, spending, and

multipliers. You should try to balance the errors across these components.

9. What are some questions to ask when evaluating or interpreting a tourism economic impact study?

Evaluating, interpreting and applying an economic impact study requires a clear understanding of the

findings and at least some knowledge of the underlying concepts and methods. Judging the accuracy or quality

of a study can be based on the reputation of the author or the quality of presentation, although a careful

evaluation of the methods that were used is the best approach. Here’s some questions to ask when reading or

evaluating a tourism economic impact study.

· Impact of what? The report should identify the action being evaluated. An economic impact assessment is

most useful when evaluating the effects of a particular action or policy. If so, the action and assumptions about

alternatives should be spelled out in presenting a with vs. without scenario. If the study reports impacts of

existing tourism activity, identify how tourism is defined (if at all). What kinds of tourism activity and

spending are included? Which trip expenses are included? Does the study include all visitor spending or only

spending of tourists who live outside the local region? Does the study address impacts of visitor trip spending,

durable goods purchases, operational expenses of a program, or construction and investment?

· On what region? The study region should be defined (preferably with a map). It should be viable both

economically and as a distinct tourism destination area. Spending that is included should be restricted to

spending in this region and multipliers should represent the given region of interest. A short profile of tourism

& economic activity in the region provides useful background for an economic impact study.

· Sources and quality of the data. The report should identify the sources of the data for estimating visits,

spending, and regional economic multipliers/models. The methods that were used to estimate impacts should

be clear. Judgements of the quality of the estimates must be based largely on an understanding of the data andEconomic impacts of Tourism Page # 14

methods that were used. A more disaggregate analysis reporting spending within at least six categories,

visitors for two or more distinct segments, and multipliers and results broken down by sector will generally be

more accurate and meaningful than a study that only uses aggregate data. Disaggregation is particularly

helpful when adjusting secondary data taken from government reports or other studies to a new situation. The

fundamental question is whether the visit estimates, spending profiles and multipliers adequately represent the

intended population and study area.

· Quality of methods. There are a number of issues to watch for in evaluating methods.

ß Visits. Has the study clearly defined which visits/visitors will be affected by the proposed action,

separated local visitors from tourists, and identified which visitors would be lost or gained due to the

action (with vs. without the action)? Are secondary sources of visitation reliable? If models are used,

how good are they and do the assumptions hold for the intended application? Has the study handled

potential double counting problems in estimating visits?

ß Spending. How accurate are the spending estimates? Do the spending averages or totals seem

reasonable? If spending averages are taken from a secondary source, evaluate the source, as well as

how well these averages may apply to the intended application. What year does the spending

represent? Has the data been price adjusted to the current (or model) year? If spending data come

from a visitor survey, evaluate the survey methods – how was spending measured, what was the

sample size, the response rate, soundness of the analysis? Are variances and confidence intervals

reported for the spending estimates? Are visitors divided into distinct segments to reduce variances?

Also make sure the units for which spending is reported match the units for visits, i.e., the study

doesn’t multiply a per party spending average times the number of person visits. If adjustments are

made in units of analysis, evaluate the assumed or estimated average length of stay or party size

assumptions.

ß Multipliers. If “off-the-shelf” or borrowed multipliers are used, investigate the source. Does the study

clearly define what type of multiplier is being used (Type I, Type III, income, sales or employment,

ratio or Keynesian) and use the multiplier appropriately? In particular, watch for studies that multiply

tourism spending by a multiplier taken from an input-output model. They should adjust for the

capture rate either by reducing spending, only using retail margins on goods purchased by tourists, or

using a “tourist spending” multiplier that takes the capture rate into account. If an input-output model

is used, the report should summarize where it came from, what year it represents, the levels of

sectoral aggregation, and the basic assumptions of the model.

· Communication and reporting of results. The study should communicate the study results in terms that are

understandable to the intended audience. For most audiences, a summary and glossary of economic terms is

helpful. Most readers will not fully understand terms like indirect and induced effects, Type I and Type III

multipliers, and input-output models. Formal definitions of the measures of sales, income, and jobs that are

reported are also needed to clarify what each of these terms include and the measurement units. For example,

is income only wage and salary income or does it also include proprietors income, rents and profits? Study

limitations and errors should be indicated.Economic impacts of Tourism Page # 15

10. What does an economic impact study cost?

The costs of a tourism economic impact study can range from $500 to $50,000 and more. Costs will

depend largely on the size and scope of tourism activity to be covered, the size and complexity of the study region,

how much primary data are to be gathered and the level of accuracy and detail desired. The greatest and perhaps

most significant cost will be the technical expertise of the analysts involved. Tourism economic impact studies

require considerable technical judgement of specialists and a mix of corresponding skills:

· Knowledge of tourism

· Expertise in conducting tourism surveys, particularly spending studies

· Regional economic modeling skills, including knowledge and access to economic data bases, multipliers

and input-output modeling systems

· Communication skills

The cost of conducting economic impact studies has dropped substantially in the past ten years due to

improvements in microcomputer programs for estimating spending and regional economic models. The three

principal components of an economic impact estimate (visits, spending, and multipliers) each involve different

costs and somewhat different skills. The costs and needed skills will vary considerably depending on whether

primary or existing data are to be used.

If levels and types of tourism activity are known and spending averages and multipliers may be taken from

secondary sources, a complete economic impact assessment can be conducted in less than a month and in many

cases for under $5,000. You are paying primarily for the time, judgement and skills of the analyst. A small visitor

spending survey may add another $5,000. For a more complete analysis of secondary effects using a formal inputoutput model, figure another $2,000- $5,000. Increase the cost estimate if several distinct alternatives are to be

evaluated or multiple regions are involved. There will generally be scale economies in these situations with

additional impact analyses costing less than half of the initial one. Costs will increase significantly if the number

and types of visitors must be estimated using a general visitor survey or a demand model. Large scale spending

surveys and custom input-output models based on primary data will also increase costs considerably.

In many cases, the tourism activity and visitor spending data needed for an economic impact analysis can

be gathered in a general visitor survey or market study. Spending averages for particular tourist segments can be

estimated by having a portion of the general survey respondents complete an extra page of spending questions.

Armed with good estimates of the number and types of visitors and their spending patterns, one can complete an

economic impact study at little additional cost.

Summary and Conclusion

The principal motivation for a business or region to serve tourists are generally economic. An individual

business is interested primarily in its own revenues and costs, while a community or region is concerned with

tourism’s overall contribution to the economy, as well as its social, fiscal and environmental impacts. A good

understanding of tourism’s economic impacts is therefore important for the tourism industry, government officials,

and the community as a whole.

Tourism economics is unfortunately a technical area, involving concepts, methods, and models that are

unfamiliar to most non-economists. In this bulletin I’ve attempted to define the key concepts and explain the basic

methods for estimating the economic impacts of tourism, hopefully in as “non-technical” a way as the subject

allows. Understanding the concepts and methods is critical to interpreting, evaluating, and applying economic

impact results. This bulletin should be read along with one or more economic impact reports that can be used as

examples and opportunities to test your grasp of the issues. For those who do not have a particular tourismEconomic impacts of Tourism Page # 16

economic impact report in mind, I’ve assembled three illustrative examples (those summarized in question 7) in a

companion bulletin.

At the risk of oversimplifying a complex topic, let me conclude with the five pieces of advice I most

frequently give to people who ask about tourism economic impacts. First, I tell them that the most important

information for estimating tourism impacts is a good estimate of the number of tourists. This requires clearly

defining what one wishes to include as “tourism” and the region of interest. Secondly, I recommend that tourists be

divided into distinct subgroups (segments) with distinct spending patterns and likely reacting differently to various

policy and marketing actions. In particular, local customers should be distinguished from visitors from outside the

region and day users from overnight visitors. Thirdly, focus most of your effort on estimating the direct effects of

tourism, usually as tourist spending in the area. Multiplier effects are not nearly as important in most cases, as

their use in tourism would suggest and multipliers tend to introduce complexities that most users of the results do

not fully understand. Even if multiplier effects are important to the study purpose, remember that any errors in

estimates of the direct effects will also be multiplied by any multiplier. Fourth, if you must use multipliers be sure

you understand them. For local impacts, I usually recommend tourism spending multipliers between 1.0 and 1.5. If

one has no idea of the size of the multiplier, I recommend using 1.0. This is easy to multiply by and refocuses us on

the direct effects. Tourism sales multipliers are often close to one because the secondary effects of tourist spending

(mostly induced) are generally just large enough to offset the spending that is not captured by the local economy. If

you must include multiplier effects, be sure to report the direct effects separately, so readers can decide whether

and when to include the secondary effects. Finally, I recommend income or value added as the best measures of

economic impacts to report. Sales and job impacts can be quite misleading, as sales may go largely to buy parts

from outside the region and job estimates are distorted by part time and seasonal positions, not to mention quite

different wage rates across industries. Income or value added are the best measures of the economic gain to the

region from tourism. It follows that income multipliers (of the Keynesian type) should be used instead of sales

multipliers.

REFERENCES

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Paul, MN: University of Minnesota, Dept. of Agricultural & Applied Economics.

Archer, B. H. 1973. The impact of domestic tourism. Bangor: University of Wales Press.

Archer, B. H. 1982. "The value of multipliers and their policy implications." Tourism Management December:

236-241.

Archer, B. H. 1984. "Economic impact: Misleading multiplier." Annals of Tourism Research 11(3): 517- 518.

Brucker, S. M., Hastings, S. W., & Latham, W. R. III (1987) Regional input-output analysis: A comparison of

five ready made model systems. Review of Regional Studies, 17:2.

Bull, Adrian. 1995. The economics of travel and tourism. 2nd edition. Melbourne, Australia: Longman.

Burchell, R.W. and Listokin, D. 1978. The fiscal impact handbook. New Brunswick, N.J.: Center for Urban

Policy Research.

Crandall, Louise. 1994. The social impact of tourism on developing regions and its measurement. In. Travel,

Tourism and Hospitality Research, second edition. J.R. Brent Ritchie and Charles R. Goeldner (eds). New

York: John Wiley and Sons Inc.

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Frechtling, Douglas C. 1994. Assessing the economic impacts of travel and tourism – Introduction to travel

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Ritchie and Charles R. Goeldner (eds). New York: John Wiley and Sons Inc.Economic impacts of Tourism Page # 17

Frechtling, Douglas C. 1994. Assessing the economic impacts of travel and tourism – Measuring economic

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Goeldner (eds). New York: John Wiley and Sons Inc.

Frechtling, Douglas C. 1994. Assessing the economic impacts of travel and tourism Measuring economic costs.

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(eds). New York: John Wiley and Sons Inc.

Getz, Donald. 1994. Event tourism: Evaluating the impacts In. Travel, Tourism and Hospitality Research, second

edition. J.R. Brent Ritchie and Charles R. Goeldner (eds). New York: John Wiley and Sons Inc.

Jackson, R. S., Stynes, D. J., Propst, D. B., & Siverts, L. E. (1990). Economic impact analysis as a tool in

recreation program evaluation. Instructional Report R-92-1. Department of the Army, Waterways

Experiment Station, Vicksburg, MS.

Johnson, Peter and Thomas, Barry (eds). 1992. Choice and demand in tourism. London: Mansell.

Lefkowitz, Martin. 1993. What 100 new jobs mean to a community. Washington D.C.: U.S. Chamber of

Commerce, Economic Policy Division.

Leistritz, F.L. and Murdock, S.H. 1981. The socioeconomic impact of resource development: Methods for

assessment. Boulder, CO: Westview Press.

Miernyk, W.H. 1965. The elements of input-output analysis. New York: Random House.

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Office.

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U.S. Travel Data Center. 1997. Impact of travel on state economies, 1995. Washington, D.C.

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Publishing Co.

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WTTC.

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WTTC.Economic impacts of Tourism Page # 18

Glossary of Economic Impact Terms

Terms are presented in groups within a logical rather than alphabetical order

Region – defines the geographic area for which impacts are estimated. The region is generally an aggregation of

one or more counties.

Sector is a grouping of industries that produce similar products or services. Most economic reporting and models

in the U.S. are based on the Standard Industrial Classification system (SIC code ). Tourism is more an activity

or type of customer than an industrial sector. While hotels (SIC 70) are a relatively pure tourism sector,

restaurants, retail establishments and amusements sell to both tourists and local customers. There is therefore

no simple way to identify tourism sales in the existing economic reporting systems, which is why visitor

surveys are required to estimate tourist spending.

Impact analysis estimates the impact of dollars from outside the region (“new dollars”) on the region’s economy.

Significance analysis estimates the importance or significance of an industry or activity to a region usually

including spending by both local residents and visitors from outside the region.

Input-output model. An input-output model is a representation of the flows of economic activity between sectors

within a region. The model captures what each business or sector must purchase from every other sector in

order to produce a dollar’s worth of goods or services. Using such a model, flows of economic activity

associated with any change in spending may be traced either forwards (spending generating income which

induces further spending) or backwards (visitor purchases of meals leads restaurants to purchase additional

inputs -- groceries, utilities, etc.). Multipliers may be derived from an input-output models.

IMPLAN is a micro-computer-based input output modeling system. With IMPLAN, one can estimate 528 sector

I-O models for any region consisting of one or more counties. IMPLAN includes procedures for generating

multipliers and estimating impacts by applying final demand changes to the model.

Final Demand is the term for sales to final consumers (households or government). Sales between industries are

termed intermediate sales. Economic impact analysis generally estimates the regional economic impacts of

final demand changes. Tourist spending is one type of final demand.

Direct effects are the changes in economic activity during the first round of spending. For tourism this involves the

impacts on the tourism industries (businesses selling directly to tourists) themselves.

Secondary effects are the changes in economic activity from subsequent rounds of re-spending of tourism dollars.

There are two types of secondary effects:

Indirect effects are the changes in sales, income or employment within the region in backward-linked

industries supplying goods and services to tourism businesses. The increased sales in linen supply firms

resulting from more motel sales is an indirect effect of visitor spending. \

Induced effects are the increased sales within the region from household spending of the income earned in

tourism and supporting industries. Employees in tourism and supporting industries spend the income they earn

from tourism on housing, utilities, groceries, and other consumer goods and services. This generates sales,

income and employment throughout the region’s economy.

Total effects are the sum of direct, indirect and induced effects.Economic impacts of Tourism Page # 19

Multipliers capture the size of the secondary effects in a given region, generally as a ratio of the total change in

economic activity in the region relative to the direct change. Multipliers may be expressed as ratios of sales,

income or employment, or as ratios of total income or employment changes relative to direct sales. Multipliers

express the degree of interdependency between sectors in a region’s economy and therefore vary considerably

across regions and sectors.

Type I multipliers do not include induced effects while Type II or Type III multipliers do.

A sector-specific multiplier gives total changes throughout the economy associated with a unit change in

sales in a given sector.

Aggregate multipliers are based on some assumed initial changes in final demand. An aggregate tourism

spending multiplier is based on an assumed distribution of tourist spending across economic sectors.

Capture rate is the percentage of spending that accrues to the region’s economy as direct sales or final demand.

All tourist spending on services within the region is captured, however, tourist purchases of goods is generally

not all treated as final demand to the region.

Purchaser prices are the prices paid by the final consumer of a good or service. Producer prices are the prices of

goods at the factory or production point. For manufactured goods the purchaser price = producer price + retail

margin + wholesale margin + transportation margin. For services, the producer and purchaser prices are

equivalent. The retail, wholesale and transportation margins are the portions of the purchaser price

accruing to the retailer, wholesaler, and shipper, respectively. Only the retail margins of many goods

purchased by tourists accrue to the local region, as the wholesaler, shipper, and manufacturer often lie outside

the local area.

Measures of economic activity:

Sales or output is the dollar volume of a good or service produced or sold

Final Demand = sales to final consumers

Intermediate sales = sales to other industrial sectors

Income is the money earned within the region from production and sales. Total income includes

Wage and salary income, and

Proprietor’s income, rents and profits

Jobs or employment is a measure of the number of jobs required to produce a given volume of

sales/production. Jobs are usually not expressed as full time equivalents, but include part time and

seasonal positions.

Value Added is the sum of total income and indirect business taxes. Value added is the most commonly

used measure of the contribution of a region to the national economy, as it avoids double counting of

intermediate sales and captures only the “value added” by the region to final products.

-74-

VI. TOURISM AND THE MILLENNIUM DEVELOPMENT GOALS

The Millennium Development Goals (MDGs) represent a global partnership

aimed at responding to the world's main development challenges, including poverty

reduction, opportunities for education, better maternal health, gender equality, and

reducing child mortality, AIDS and other diseases. The MDGs are an agreed set of

goals to be achieved by 2015 based on all actors working together at global, regional

and national levels. Strategies based on working with a wide range of partners can

help create coalitions for change that support the MDGs at all levels; benchmark

progress; and help countries build the institutional capacity, policies and programmes

needed to achieve the MDGs.

62

It is generally assumed that international tourism can

generate benefits for poor people and poor communities in the context of sustainable

tourism development, usually without specifically targeting the poor.

However, greater attention has been given to the argument that tourism could

be more effectively harnessed to address poverty reduction in ways that are more

direct. For example, according to UNWTO, tourism can contribute to development

and poverty reduction in a number of ways. Although the focus is usually on

economic benefits, there can also be social, environmental and cultural benefits.

Poverty can be reduced when tourism provides employment and diversified livelihood

opportunities, which provides additional income. This can contribute to reducing the

vulnerability by increasing the range of economic opportunities available to

individuals and households living in conditions of poverty. Tourism can also

contribute through direct taxation and by generating taxable economic growth since

taxes can then be used to alleviate poverty through education, health and

62

UNDP, Millennium Development Goals. www.undp.org/mdg/ -75-

infrastructure development.

63

These points refer to the general contribution of tourism

at the macro level. When considering targeted interventions aimed at achieving

specific MDGs, then actions to make tourism contribute to poverty alleviation at local

and community levels needs to be considered. At the same time, however, it is equally

important to consider how such targeted interventions can be replicated in other

communities or scaled up to have a wider impact.

Targeted interventions to address the issues raised in the Millennium

Development Goals require that the linkages between tourism and poverty be

identified. Figure 3 illustrates many of these linkages.

63

WTO, Tourism and Poverty Alleviation, (Madrid: WTO, 2002), p. 31 -76-

Table 14 develops the figure further and lists the potential contributions that

appropriate interventions in the tourism sector can make to the achievement of each of the

MDGs. As discussed in chapters II and III, the creation of income and employment in the

tourism industry and the tourism economy would contribute to reducing the proportion of

people living on less than a dollar a day (target for Goal 1).

Similarly, the provision of infrastructure facilities and services for tourists (roads,

communications, health and sanitation services) can be designed to benefit local communities

at the same time. Such facilities can contribute to the achievement of Goals 4, 5, 6 and 7. In

the area of gender equality and the empowerment of women (Goal 3), tourism is recognized

Figure 3. Linkages between tourism and poverty reduction -77-

as a sector that employs a high proportion of women. However, careful attention needs to be

given to gender patterns in tourism careers and employment should be carefully studied and

analyzed with particular attention to gender segregation by job category or wage gaps

according to gender.

Table 14. Contribution of tourism to achieving the Millennium Development Goals

Goal Contribution of tourism

1. Eradicate extreme

poverty and hunger

(a) Tourism stimulates economic growth both at the

national and local levels and promotes the growth of the

agricultural, industrial and service sectors;

(b) Tourism provides a wide range of employment

opportunities easily accessible by the poor. Tourism

businesses and tourists purchase goods and services

directly from the poor or enterprises employing the

poor. This creates opportunities for micro, small and

medium-sized enterprises in which the poor can

participate;

(c) International and domestic tourism spreads

development to poor regions and remote rural areas of a

country that may not have benefited from other types of

economic development;

(d) The development of tourism infrastructure can benefit

the livelihood of the poor through improvement in

tourism-linked service sectors, including transport and

communications, water supply, energy and health

services.

2. Achieve universal

primary

education

(a) The construction of roads and tracks to remote areas for

tourists also improves access for school-age children

and for teachers;

(b) Tourism can help local resource mobilization, part of

which can be spent on improvement of education

facilities.

3. Promote gender equality

and empower women

(a) The tourism industry employs a high proportion of

women and creates microenterprise opportunities for

them. It promotes women’s mobility and provides

opportunities for social networking.

4. Reduce child mortality

5. Improve maternal health

6. Combat HIV/AIDS,

malaria and other

diseases

(a) The construction of roads and tracks to remote areas for

tourists also improves access to health services;

(b) Revenues accruing to national and local governments

through taxes on the tourism industry can be used to

improve health services and nutrition for young

children and their mothers; -78-

Goal Contribution of tourism

(c) Tourism raises awareness about HIV/AIDS issues and

supports HIV/AIDS-prevention campaigns;

(d) Tourism aggravates the spread of HIV/AIDS (negative

effect).

7. Ensure environmental

sustainability

(a) Tourism can generate financial resources for

conservation of the natural environment;

(b) Tourism raises awareness about environmental

conservation and promotes waste management,

recycling and biodiversity conservation;

(c) Uncontrolled tourism may generate negative

externalities as a result of pollution, congestion and

depletion of natural resources (negative effect).

8. Develop a global

partnership for

development

(a) Tourism contributes to the socio-economic

development of least developed countries, landlocked

countries and island developing countries through

foreign exchange earnings and the creation of job

opportunities;

(b) Tourism stimulates the development of the transport

infrastructure, which facilitates access to and from the

least developed countries, landlocked countries and

island developing countries;

(c) Tourism stimulates internal and external trade and

strengthens supply chains;

(d) Tourism promotes the integration of isolated

economies with regional and global flows of trade and

investment;

(e) Tourism reduces the burden on government budgets

through implementation of public-private initiatives;

(f) Tourism creates decent and productive work for youth;

(g) Tourism provides opportunities for bilateral,

multilateral and subregional cooperation among

countries;

(h) Information technologies play an important role in

integrating tourism enterprises into global tourism

markets.

Source: United Nations ESCAP, Transport and Tourism Division, Transport Policy

and Tourism Section. -79-

The MDG agenda and the role of tourism in poverty alleviation converges

with recent efforts based on the concept of pro-poor tourism. Pro-poor tourism is an

approach to tourism development and management that results in increased net

benefits for poor people by enhancing linkages between tourism businesses and poor

people. Its strategies focus on the local or community level and aim at increasing

tourism's contribution to poverty reduction and enabling poor people to participate

more effectively in tourism development. Among the many different types of poor

people to be considered are: staff, neighbouring communities, land-holders, producers

of food, fuel and other suppliers, operators of micro-enterprises, informal businesses,

craft-makers, other users of tourism infrastructure and resources, and so forth. Types

of pro-poor tourism strategies include economic benefits, livelihood benefits and

increasing local participation by building mechanisms for consultation. Such

strategies often begin by policies, processes and actions designed to reduce negative

impacts on poor people.

64

An instructive example of taking action based on the MDGs and the Tenth

Plan of the Government of India is a four-year project (2004-2008) entitled

“Endogenous Tourism for Rural Livelihoods” being funded by UNDP. The project

incorporates strategies designed to work with a wide range of partners to create

coalitions for change in support of achieving the MDGs at the local level and build

institutional capacity based on a new model known as endogenous tourism, which is

linked to the concept of rural tourism. In India, 74 per cent of the population resides in

7 million villages, which makes the concept of rural tourism appropriate.

64

Pro-poor Tourism www.propoortourism.org.uk/strategies.html -80-

Urban-centric industrialization along with the stress of urban lifestyles has led

to "counter-urbanization" thinking.

65

That is, theories of demographic transition due

to migration based on past patterns presumed a series of three major population

movements (rural to rural, rural to urban and urban to urban) as determined by

industrialization, economic development and urbanization. Demographers have

recently recognized a fourth movement, especially in developed countries: urban to

rural, or counter-urbanization. It is generally presumed that developing countries such

as India are going through a delayed transition in migration patterns, where

urbanization has contributed to falling income levels and fewer job opportunities in

rural areas, thus contributing to ongoing rural to urban migration. The Indian

government aims to identify and strengthen local resources (cultural heritage, local

traditions, art and crafts) and empower communities in rural areas through

management of endogenous tourism with a view to influencing the patterns of

migration.

In 2004, UNDP began concrete planning on an Endogenous Tourism Project

for Rural Livelihoods in India, involving communities throughout the country. The

project is structured in terms of India’s cultural heritage and indigenous traditions,

with common facility centres set up for craftspeople with local showcases for art and

craft wares, along with the history and traditions of each area. Communities manage

the project activities with partial financing from an incentive fund to encourage a

variety of rural tourism initiatives and the marketing of local craft products, as well as

dissemination of experiences and practices. Rural tourism in India is in line with

65

Thomas Kontuly, “International Comparisons of Counter-Urbanization”, Geographical

Perspectives, vol. 61 (Spring 1988), pp. 1-5. David Plane, Christopher Henrie, and Marc

Perry, “Migration across the Micropolitan /Metropolitan Spectrum”, paper presented at the

41st Annual Meeting of the Western Regional Science Association, Monterey, California, 17-

20 February 2002. -81-

increased levels of awareness, growing interest in heritage and culture, improved

accessibility and environmental consciousness. This new style of tourism in village

settings would allow international and domestic tourists visitors to experience a

unique lifestyle as well as sustain livelihoods in villages.

66

The main features of the project are presented in box 8.

66

UNDP, “Endogenous Tourism for Rural Livelihoods”, Fact Sheet, May 2007.

http://data.undp.org.in/factsheets/hd-rl/may07/ETP.pdf

Box 8. India: Endogenous Tourism for Rural Livelihoods

From 2003 to 2007, the Ministry of Tourism and Culture, Government of India, has been

working with 34 implementing agencies, 30 NGOs and 4 panchayats at 36 sites across 20 states

throughout the country. Alternative models of rural tourism are being developed across India,

since the government has identified tourism as a vehicle for generating employment and

promoting sustainable livelihoods. Micro-financing is included as part of the project.

Cultural heritage and indigenous tradition are the foundations of the project’s model of rural

tourism. Common facility centres for village craft persons and village art centres are set up at

the 36 project sites to showcase the culture and living heritage characteristic of each site.

Where appropriate, rest houses are built based on local skills and construction materials.

People in the communities are trained in different aspects of hospitality to provide services of

international standard.

Community ownership and management is central to the project’s strategy. At every stage in

the implementation, care is taken to ensure the participation of women, youth and other

disadvantaged groups.

In order to mainstream gender and HIV/AIDS concerns into the project, one of the partner

agencies is the Health Institute for Mother and Child.

By October 2006, most sites were ready to receive tourists and all implementing partners had

become sensitized to gender and HIV/AIDS concerns.

The project won a World Travel Award in the category of “World’s Leading Responsible

Tourism Project” in 2006.

Source: www.exploreruralindia.org-82-

It has been noted that results from such strategies could mean that low

numbers of people are employed and they might be concentrated in certain types of

jobs. However, the spread of earnings, collective income and other livelihood benefits

throughout a community can make pro-poor tourism significant to local poverty

reduction. It is not always possible to say what contribution this makes to national

poverty reduction efforts, since that depends on the scale of tourism within the

economy and the degree of pro-poor change within the sector. However, such tourism

can be very significant to a district or provincial economy, even if it might not be

large enough to affect national aggregates.

67

There are limits to using case studies for assessing the effectiveness of tourism

in alleviating poverty. However, final evaluation of multi-site projects such as India’s

“Endogenous Tourism for Rural Livelihoods” suggests the possibility of learning and

then scaling up such a project for wider coverage. Consideration of the linkages

between tourism and the MDGs clearly illustrates the potential of tourism to have a

greater socio-economic impact. Governments and other stakeholders face the

challenge of translating the potential into actual achievements.

One effort to assess the effectiveness of tourism projects was a World Bank

study that examinined the role of tourism in the World Bank's development strategy

and its lending activities in order to estimate the impacts on the sustainable

development of Bank actions. While tourism has not played an important role in the

Bank's development strategy in the recent past, there are some signs that it is being

seen as more important. Of the 1,500 or so new projects in the Bank from 1998 to

2003, about 6 per cent in terms of number and 3 per cent in terms of value had some

67

Caroline Ashley et al., Pro-Poor Tourism Strategies: Making Tourism Work for the Poor,

Pro-Poor Tourism Report Number1 (Nottingham, United Kingdom: Overseas Development

Institute, 2001), p. 41. -83-

tourism dimension. In terms of lending, direct Bank operations have invested in

infrastructure, which facilitates tourism development. Others that have tried to

mitigate the negative impacts of tourism, such as the spread of diseases such as

HIV/AIDS. In terms of strategic and policy advice, the Bank has supported projects

that were environmentally and socially sustainable and that helped reduce poverty.

The assessment looked at projects that focus on economic development through

infrastructure provision. Among the 1,500 or so projects that were appraised, 32 had

tourism as a central or significant feature. Only eight of the 32 provided any real

quantification of the benefits of tourism. A careful look at these eight revealed that

larger infrastructure investment projects were effective in providing benefits from

tourism. Smaller projects with investment in improving facilities and providing

technical assistance were more effective and yielded higher returns. Projects involving

cultural site development and promotion were also effective in yielding large benefits.

In terms of environmental impacts, the projects generally followed good practice and

ensured that negative environmental impacts were avoided or mitigated. Social

impacts were studied in less detail, according to the study.

68

VII. THE ROLE OF GOVERNMENT

Government intervention may be necessary to enhance the contribution of

tourism to socio-economic development and poverty reduction. One of the principal

roles of Governments is to set policy and legislative frameworks for tourism. Two

main reasons why governments should formulate tourism development strategy are:

68

Anil Markandya, Tim Taylor and Suzette Pedroso, “Tourism and Sustainable Development:

Lessons from Recent World Bank Experience”, (Washington, D.C.: IBRD, 2003), pp. 20-21.

http://info.worldbank.org/etools/docs/library/107771/SD_Communication/epublish/zip_files/b

iodiversity_russia2003/pdf/TourismSDMarkandya-Taylor.pdf

Department of Economic and Social Affairs

Commission on Sustainable Development

Seventh Session

19-30 April 1999, New York

TOURISM AND SUSTAINABLE DEVELOPMENT

SUSTAINABLE TOURISM: A NON-GOVERNMENTAL

ORGANIZATION PERSPECTIVE

Background Paper # 4

Prepared by the UNCSD NGO Steering Committee1

Sustainable Tourism: A Non-Governmental Organization Perspective

prepared by the UNCSD NGO Steering Committee

A. Introduction

1. Tourism is a rapidly growing phenomenon and has become one of the largest industries in the

world. The impact of tourism is extremely varied. On one hand, it plays an important and certainly

positive role in the socio-economic and political development in destination countries by, for instance,

offering new employment opportunities. Also, in certain instances, it may contribute to a broader

cultural understanding by creating awareness, respecting the diversity of cultures and ways of life. On

the other hand, as a tool to create jobs, it has not fulfilled its expectations. At the same time, complaints

from tourist destinations concerning massive negative impacts upon environment, culture and residents’

ways of life have given rise to a demand for a more sustainable development in tourism. Different

parties will have to be involved in the process of developing sustainable tourism. This section focuses

on what the tourism industry itself can do in order to increase its sustainability, defines three major

problems, and suggests possible tourism initiatives to help solve these problems. Other problems

should also be included in the discussion for it to become exhaustive.

B. Industry Initiatives for Sustainable Tourism

Problems

Decreased access to natural resources for the local communities and environmental degradation

4. Tourism is not, as many people assert, a clean and non-polluting industry. A major problem is the

lack of a common understanding of what sustainable tourism or “ecotourism” means. This ambiguity

leads to violations of environmental regulations and standards. Hence, the environmental problems

evolving from tourism are manifold. First of all, the tourism industry is very resource and land

intensive. Consequently, the interest of the tourism sector will often be in conflict with local resource

and land use practices. The introduction of tourism will imply an increased stress on resources

available. An influx of tourists into the area will lead to a competition for resources. Employees

working at the tourist sites compound this competition. Almost as a rule, tourists are supplied at the

expense of the local population.

5. Tourist activities imply an intensified utilisation of vulnerable habitats. Investors and tourists do not

necessarily possess awareness on how to use natural resources sustainably, and subsequently this

utilisation often leads to a degradation of resources. Tourism is also a major generator of wastes. In

most tourist regions of developing countries, sewage, wastewater and solid waste disposal are not

properly managed or planned. Lastly, tourism is also responsible for a considerable proportion of

increased volumes and mileage in global transport and hence the associated environmentally damaging

pollutant emissions. The tourism industry has not shown sufficient willingness to (internalise or)

compensate the cost of conservation of bio-diversity in, for instance, protected areas, even though they

can profit from it.

Increasing cultural erosion and disrespect for human rights

6. Tourism is a powerful agent of change. International tourism acts as a catalyst for the transition

from traditional ways of life to so-called modern, Western forms of society. Accordingly, tourism often

brings with it the introduction of new behaviour trends and norms. Very often, these are contrary to

traditional norms existing in the host community, and can come into conflict with its cultural identity

and threaten the traditional value systems there. The problem is that the investors seem to have a lack

of cultural understanding of the invested society. There is a need for an increased awareness that

establishment of new hotels etc. will have its consequences on the society and the people who live in

it.2

7. Tourism has become associated with violation of human rights. Many destination countries have

experienced an increase in criminality, prostitution, alcohol and drug abuse as a consequence of

tourism. Furthermore, child labour is commonplace in the tourism industry (particularly in the informal

sector). According to estimates made by ILO (International Labour Organisation), between 3 and 19

million children and teenagers work in the tourism sector. A particularly abominable form of violation

of human rights is child slavery and despicable abuse of children taking place in the booming sex

industry in many countries. In these countries, tourism has led to an incredible increase in prostitution

and also in the exploitation of children. The tourism industry has not yet come up with a general

condemnation of these violations of human rights.

Unqualified jobs and foreign exchange leakage

8. The tourism industry is characterised by a high degree of monopoly, which implies a concentration

of services and profits into very few big transnational corporations. In many countries, tourism facilities

mostly belong to foreigners. Furthermore, in local host communities in many countries a relatively

small number of people are involved in the tourism industry in host communities in many developing

countries. Very often, there is a lack of qualified manpower in the locality. Hence, most employees are

recruited form the big cities, neighbouring countries or even from the country of origin of the investors.

9. Multiplier effects from tourism are less significant than is often assumed. One reason is that tourism

industries purchase most of their inputs (materials, products or services) in their country of origin. As

a result, a considerable amount of foreign exchange revenues leaks from the destination countries. The

more goods, services, physical capital and human capital a country must import for its tourism services,

the higher the leakage. Very often the investors are not approaching the local community to see what

it actually can provide. In addition to this, the General Agreement on Trade in Services (GATS), with

its liberalisation of global trade and services, is increasingly undermining the possibilities of individual

countries and regions to control their tourism industries and the possible economic gains from tourism.

Solutions

Decreased access to natural resources for the local communities and environmental degradation

10. In general, the tourism industry should engage in promoting sustainability as a hallmark for

investors. More specifically, investors in tourism should strive to adopt environmentally sound

technologies or other measures to minimise the consumption of local ground water. In the case of water

utilisation, such measures might be water saving equipment, desalination systems and collecting and

utilising rainwater. Using other types of resources in a sustainable manner is, of course, also crucial.

There is a need to use ecological materials and installation of renewable sources of energy systems

(solar energy) in all new buildings and new construction. Furthermore there should be an acceleration

of installation or solar/wind power in all public work projects of communities where tourism will be

introduced. To prevent or minimise the impact of chemical inputs in soil, water and health, one should

start utilising sound ecological methods, including IPM (Integrated Pest Management). Ecological

methods need to be applied in all areas utilised for tourism, including in the maintenance of golf courts,

gardens and recreational facilities.

11. Pollution of ground and coastal waters must be prevented, and recommendations must be made

(perhaps even legislation) for tourism investors to invest in proper sewage treatment facilities.

Appropriate waste disposal systems and ways to separate garbage into organic and non-organic waste

should be developed. Organic waste can be composted and possibly reused on hotel gardens or even

for local farming. This could be done through collaboration with local residents. Residents could

organise themselves and manage the allocated dumping sites, and hence benefit from the system in

receiving payment from the hotel for services rendered. A system to separate the different materials,

and recycle some should be in place at the landfill site, thus reducing the waste even further.3

12. To avoid degradation of the natural environment, tourism projects can help finance protected areas

and safeguard ecologically sensitive regions against further environmental deterioration. By

empowering local populations and have them participating in the entire process, sustainability will be

ensured as it becomes accepted by and adjusted to the local communities. Also, a protected area might

certainly be a suitable tourist-attraction, where tourists can experience amazing nature and learn about

conservation and traditional uses of natural resources in the area.

13. Investors in tourism should always respect the traditional land tenure system in the area and the

traditional user-right systems of resources. In regard to this, the communication and consultation with

the local communities about resource-use is important. Tourism investors should not exclude local

people from using local resources, and thus take away what they depend on for maintaining their well

being. The tourism industry can and must take initiatives to implement that polluter(s) pay a principle

(or other forms of internalisation of externalities) for pollution related to tourism operations. This may

be organised and carried out through local tax systems or through funds established by the tourism

industry for local community development. However, the paid principle should be applied for minor

pollution only and should not be developed into a possibility for investors to pay a symbolic fine for

imposed irreversible negative impacts on the local environment.

14. Inaccurate and/or mild environmental legislation in destination countries may possibly attract more

foreign investors contributing to fast economic growth and development, but with environmental

damage as a consequence. To avoid the dilemma, destination countries will have to choose between

economic development and environmental protection international. Multinational enterprises must be

committed to follow the environmental standards of their home country should these be stricter than

those at the destinations.

Increasing cultural erosion and disrespect for human rights

15. The tourism industry should promote projects, which are compatible with the cultural identity of

the local population's way of life. Furthermore, the tourism sector should always make sure it acts in

accordance with the cultural heritage, and respect the cultural integrity of tourism destinations. This

might be accomplished by defining codes of conduct for the industry and hence providing investors

with a checklist for sustainable tourism projects.

16. Establishing and developing tourist training programmes could be one way of managing codes of

conducts for the tourists. Here, tourists can be informed and educated about the destination for their

travel both before and after their arrival at the site. At the site, tourist information centres can be

established through funding from the investor. The information given to tourists should include codes

of conduct regarding appropriate behaviour and clothing. It is reasonable to assume that people's

offending behaviour is largely a consequence of ignorance rather than intention. Consequently,

information and facts about the destination, ways of life, history, cultural heritage is crucial to help

tourists get along.

17. It is an absolute must that tourism investors do not engage in or promote child labour and

prostitution. Moreover, it is appropriate that the industry commit themselves to a global campaign

against such and any other violation of human rights. Evaluating the sustainability of the tourism

development, in regards to cultural and human rights aspects, is highly recommended for those

responsible for the tourism projects. As with the case mentioned earlier of preventing environmental

degradation, this must be carried out through communication and consultation with the local

communities.4

Unqualified jobs and foreign exchange leakage

18. By devising local training programmes and establishing educational projects, the tourism industry

can ensure that qualified local people are employed in their projects. One should train the local people

instead of foreigners to become guides due to their knowledge of the area and resources. The investors

should be responsive to the kind of knowledge, abilities and skills found in the local communities. Very

often such knowledge and skills are well fitted to be used in tourist activities be it fishing trips, nature

trails, souvenir sales or dancing courses for tourists etc.

19. To constrain foreign exchange leakage, those responsible for the tourism projects should ensure

that local inputs are purchased for their projects. A proper examination of local resources available will

be beneficial for both the industry and the local residents. Usually, there is considerable local

willingness to start producing new products if a market for these products exists. The tourism sector

should also adopt measures to prevent foreign exchange leakage by a commitment to re-investment of

a fair share of the locally accrued profit. We have already mentioned protected areas, training

programmes on codes of conduct for tourists, or possible training of local employees, as projects in

need of funds. Initiatives towards more local community development projects should also be

appropriate.

20. The tourism industry should promote the establishment of small and medium-sized tourism

enterprises which, compared to large-scale hotels etc., have far more moderate impacts on the

environment. It is the industry's responsibility to act as a model for communities to show that it is

possible to do business whilst protecting natural resources. The industry should also promote and

support local communities to start tourism-related businesses and grant access to low interest loans.

It is the responsibility of the tourism sector to ensure total transparency in all transactions, and to

prevent tourism projects from being used as projects for laundering illicit money, as well as to refuse

using bribes as a means to obfuscate or avoid government rules and regulations. There should be a

global boycott against those investors involved in such or other types of illegal activities.

General recommendations and possible solutions which concern all three problem areas

21. Empowerment of residents at tourist destinations, through local participation, may be facilitated

by providing written and legally binding contracts between local people and tourism investors. The

contracts will help to avoid broken promises, which too many examples and previous experience prove

to be a huge problem. In addition to the mentioned examples (providing proper information for tourists

and establishing training programmes for residents), the tourism industry, through for instance the

WTTC or the WTO with NGOs in the selection panels, could issue awards especially for sustainable

tourism projects as an encouragement for investors.

Agents and Partnerships for change

22. In this section, the focus has been on what the tourism industry itself can do in order to augment

and improve its environmental, cultural, social and economic profile and make sure this is sustainable.

However, the industry's effort cannot be successful without a profound collaboration with all

stakeholders.

23. Within the industry, it is important that both small and large-scale tourism operators are included

in the collaboration and that they participate in solving problems related to tourism development. As

mentioned, a sustainable development of the tourism industry can only be ensured through participation

of all local residents in the destination countries. There is a need for a willingness and ability for the

partners to work with this kind of bottom-up approach. In this context, both environment and social

NGOs have an important role to play, putting pressure on the industry and facilitating contracts and

local participation for community development. Governments in both destination and countries of5

origin of tourists and investors are responsible for providing appropriate legislation for sustainable

tourism development, and to follow up the tourism projects with sufficient monitoring and appropriate

sanctioning. Exchange of successful experiences of sustainable tourism projects is an important factor

in this connection. Lastly, an interdisciplinary approach to the problem is necessary: using local,

regional and/or international consultative forums.

C. Influencing Consumer Behaviour to Promote Sustainable Tourism

Problems

24. International tourism plays an ambivalent role in contributing to cultural exchange and sustainable

development. On the one hand, it involves a highly buffered, short-term consumer experience of other

locales. Tourists can pay and leave, remaining isolated from negative impacts at the local level. On the

other hand, tourism may increase recognition of the importance of respecting cultural diversity and

developing an identity as a world citizen. It offers opportunities to educate consumers regarding

responsible tourism and sustainable development. Consumers can play a major role in the

transformation of societies towards sustainability. While mass tourism in the past was rather

producer-driven, the industry today is becoming increasingly consumer-driven. In highly competitive

tourism markets, well informed, responsible consumers can put increasing pressure on the industry to

behave more responsibly.

25. A number of official proclamations have affirmed every individual's right to rest and leisure

including tourism. However, tourism remains an unobtainable luxury for the majority of the world's

population. Tourists primarily originate from affluent industrialised societies where tourism has become

a mass phenomenon. Tourists’ values, attitudes and behaviour are determined by their social

environment, cultural identity and way of life which may be in conflict with local customs. Tourism is

heterogeneous in nature, made up of many different types of traveller, seeking a wide range of tourism

products. Demand is influenced by irrational factors, e.g. fashion and trends. Demand depends on the

availability of time and money, on images, perceptions and attitudes. Tourists have various needs,

desires and motivations, both of a 'push' and 'pull' nature. While household incomes in major touristsending countries are declining, industry sales projections continue to grow, indicating increasing

competition. The consumer mind is set on discount prices and "buy now/pay later" options. This poses

serious threats, as prices already lag far behind any realistic accounting of tourism costs and impacts.

26. Many of the demand patterns in tourism reflect the unsustainable lifestyles of industrialised

consumer societies. Tourism acts as an agent in exporting these life-styles and consumerist attitudes

to less industrialised societies via demonstration effects and modelling. Tourism increases demand for

imported consumer goods in the destinations, with detrimental effects on the environment, due to the

ecological costs of transport and the high amount of waste generated. Increasing imports also reduce

local/national economic gains, due to foreign exchange leakage.

27. The over-consumption of resources by tourists and tourism infrastructure (e.g. the excessive use

of water, firewood or food) is incompatible with sustainable development. The carrying capacity of

natural environments is often exceeded with the addition of tourism demands. Tourist demand for

resources (land, water, energy, food) may also compete with the needs of local people and may increase

social inequality, gender inequality and injustice. Tourist transport, especially air travel, is highly energy

intensive and causes pollutant emissions. Many tourism activities such as skiing, boating, mountain

hiking, motorised water-sports (e.g. jet skies), and trekking represent stress for fragile ecosystems.

Tourists often lack information and awareness about their impact in a different culture and

environment, about their impacts on socio-economic and socio-cultural development, and about the

environmental costs of tourism. While tourists may be open to learning, they are often unaware of

inappropriate behaviour and have little guidance on how to improve them. Others may refuse to adapt6

to local life-styles (even when informed) insisting on their freedom to behave as they want.

28. While the tourism industry may be willing to improve their products and services, there is a conflict

between the industry's pursuit of economic gains and social and environmental responsibility. The

industry lacks information on the requirements of sustainable tourism and on how to integrate economic

forces with environmental and social requirements. Tourists shopping for escapism generally abide by

one fundamental consumer ethic: receipt upon payment. Consumer advocates may intervene where

inferior customer service is delivered. However, the sustainability of corporate practices is

self-regulated. This conflict of interest within the industry, and consumers' low awareness of tourism

impacts, have led to a widespread abuse of 'green' labeling.

29. The mass media, especially television through films and reports about events, sights, etc. in other

parts of the world, are increasingly influential on travel decisions and consumer behaviour in the

destinations. However, these programmes often serve primarily as advertisements, painting images of

destinations, rather than providing relevant information for potential travellers.

30. There is a lack of reliable and appropriate (e.g. age and gender segregated) research data on the

determinants of tourist demand, motivation and behaviour. Few countries, whether tourist-sending or

tourist-receiving, collect such data that are helpful under sustainable development criteria. Most studies

of tourist behaviour focus on mainstream markets or market segments, rather than assessing or

modelling sustainable alternatives. Governments in many tourist destinations and local communities

have little or no information on what to expect from tourism and the incoming tourists, and how to

influence and control tourism and guide tourist behaviour; They are controlled by international/global

institutions, the industry and the consumers. Governments of the affluent countries are only beginning

to look at the issues of outgoing tourism. They are not yet sufficiently aware of their responsibility and

methods to influence tourist behaviour by political and legal guidelines/criteria and appropriate

planning and policies. Trade unions have fought successfully for shorter working hours and more

vacation. However, they need to take more responsibility for helping to create a leisure industry that

is more sustainable.

Solutions

31. Consumer behaviour can and must be influenced by:

· Fighting unsustainable forms and aspects of tourism, at the various levels, by sanctioning

unacceptable behaviour and discouraging inappropriate consumer behaviour.

· Promoting responsible and sustainable patterns of behaviour, at the various levels, by

promoting best practises and encouraging responsible consumer behaviour. There are

different types of instruments and remedial measures available:

· Legal measures (rules, regulations, sanctions);

· Market based instruments, such as taxes to influence market prices;

· Promotion of and (financial) support for best practice;

· Industry self-monitoring/codes of conduct;

· Information, education and research.

Agents and Partnerships for Changes

Institutional Action & Possible Partnerships

32. Consumer behaviour in tourism is both a product and cause of policies by government and industry.

Therefore, a comprehensive approach is required to solve the problems associated with market-driven

tourism. Tourism should be viewed as a major development issue that all stakeholders need to be

actively engaged with. To develop effective partnerships, the imbalance of power between the different

stakeholders needs to be addressed.7

33. UN Action

· Establish an NGO tourism advisory group for UN to provide technical support, analysis,

and strategic advice;

· Create a 'best practices' information clearing-house, in order to collect consumer

information useful to understanding and positively influencing consumer behaviour and to

make documentation accessible on an equitable basis;

· Initiate a broad information and awareness campaign to highlight damaging forms of

tourism and impacts, providing tools for informed decision-making. Initially, target

participants in the CSD and CBD processes to clarify roles and responsibilities;

· Research and develop effective certification schemes, form a technical group under the

CSD to assess how certification can be improved, e.g. through the review of voluntary

codes set up by CSD1998;

· Designate an 'ombuds' office jointly between the CSD, CBD, and UN-CHR to encourage

diligent self-regulation and compliance with international standards for sustainable tourism;

· Develop guidance on tourism as an issue within Local Agenda 21 processes.

34. Governmental Action

· Introduce and enforce legislation to abolish child prostitution, implement effective control

mechanisms, conclude judicial assistance agreements;

· Regulate tourist access to ecologically fragile or stressed natural areas;

· Tourist-sending countries: develop policies on outgoing tourism from a development

perspective;

· Provide frameworks for ecologically appropriate pricing by strictly applying the polluterpays-principle to internalise external costs. This includes ecological tax reforms including

the taxation of aviation gasoline and oil, removal of subsidies/other economic incentives

with negative environmental impacts.

· Improve conditions for sustainable consumer behaviour by providing/promoting

sustainable tourism facilities;

· Promote environmentally friendly modes of transport and transport concepts, reduce

tourism-related traffic, shift demand to less environmentally damaging modes of transport;

· Promote renewable sources of energy (such as solar power), reduce the use of

non-renewable energy and of limited local resources, through more sustainable

practices/consumption patterns.

· Develop information and education programmes in co-operation with local stakeholders

ensuring all stakeholders' involvement (e.g. women's); provide information to tourists on

appropriate behaviour (sensitivity, respect for/adaptation to local culture), e.g. by

establishing information centres in destinations, or by including briefing material for

package tours;

· Take into account the specific information needs of various market segments, provide

information to the local population on the opportunities and risks from tourism and on how

to influence tourist behaviour;

· Adopt, observe, implement and promote codes of conduct, e.g. the planned WTO-OMT

'Global Code of Ethics for Tourism';

· Integrate sustainable development education including tourism in the curricula of schools

at all levels, universities and training institutions, involving all stakeholder groups, create

and promote open networks for information and research on sustainable tourism,

disseminate and implement results;

35. Tourism Industry Action

· Promote sustainable tourism products, using market related instruments and incentives,8

such as contests, awards, certification, model projects, culturally sensitive quality labels

covering both environmental and social sustainability;

· Reduce inappropriate consumption, use local resources in preference to imports in a

sustainable manner; reduce and recycle waste, ensure safe waste disposal, develop and

implement sustainable transport policies and systems, e.g. efficient public transport,

walking, cycling in destinations;

· Provide tourists with authentic information, enabling them to understand all environmental

and related aspects (e.g. human rights situation) of tourism when selecting any destination

or holiday package; educate visitors in advance of arrival and give guidance on 'dos' and

'don'ts'; make tourists aware of their potential impact on and their responsibilities towards

host societies;

· Provide information on respecting the cultural and natural heritage of destination areas;

employ tour guides who portray societies honestly and dispel stereotypes;

· Ensure that the marketing of 'green' tourism reflects sound environmental policy and

practice; use non-exploitative marketing strategies that respect people, communities and

environments of destinations, dismantle stereotyping, integrate sustainable tourism

principles when creating new marketing strategies;

· Train staff to foster tourist responsibility towards the destinations, encourage multi-cultural

education and exchange;

· Actively discourage exploitative sex tourism, particularly sexual exploitation of children,

and tourism which causes or contributes to social problems;

· Adopt, observe, implement and promote codes of conduct.

36. NGO Action

· Disseminate information to a wide public about the complexity of tourism and about the

objectives and criteria of sustainable tourism;

· Educate tourists to change consumption patterns and promote appropriate, environmentally

and socially acceptable behaviour in the destinations;

· Launch broad awareness campaigns on the worst impacts of tourism, to be funded by

international governmental and non-governmental agencies;

· Promote relevant research on tourism impacts, criteria for sustainable tourism and

possibilities for implementation;

· Monitor tourism development, policy, industry initiatives, and local people's reaction to

tourism development and policy, and implementation of stakeholder action.

D. Promoting Broad-based Sustainable Development through Tourism whilst Safeguarding the

Integrity of Local Cultures and Protecting the Environment - Community Development

Problems

37. Early tourism development has given little consideration to natural resource limitations, impacts

on wildlife and indigenous cultures. The human environment and development has been largely

ignored. Within the process of globalisation local communities' participation and nature conservation

are threatened and often overlooked.

38. If tourism is to be sustainable, it must improve the lives of local people, protect their environment

and health, and offer them a better future. In many instances, tourism can be seen as a vehicle to

empower local communities and protect the environment through the development of new employment

opportunities, the enhancement of local economies, preservation of indigenous knowledge and

practices, public awareness and education. Sustainable tourism can create positive opportunities for

community development in remote areas. The business sector can choose sustainable tourism over

other more polluting ventures. Long and short-term development plans should be developed so that9

tourism and its benefits are spread within the area. To develop tourism in a sustainable manner, it is

necessary to define optimal tourism destinations in local areas and regions, ensuring enjoyment for the

tourist and minimum impact or disruption for the environment and local communities.

39. Complex and broad-based local communities' involvement in tourism development requires

targeted investment strategies implemented by local decision-makers. Those strategies do not exist in

many areas and the development of tourism is not planned. Often, tourism investments are imposed

from the outside, and the potential for sustainable forms of tourism is weakened. Alternatives to mass

tourism (e.g. cultural and “ecotourism”) can be influential in changing the nature of tourism. Tourism

can benefit both tourists and local communities and allow for two-way interaction and education.

Solutions

40. In order for tourism to become a sustainable industry, countries, states, regions, and individuals

must work with new technology, natural resource management and marketing concepts. Ideally,

participatory planning and implementation will be a part of Local Agenda 21 processes. To ensure

community involvement and to safeguard local cultures, sustainable tourism development should

therefore involve all stakeholders in tourism development at all appropriate levels, facilitate the

development of tourism services that are planned, managed and reviewed by the host community in

Local Agenda 21 processes. This will also ensure that tourism revenue stays in the host communities

to enhance livelihoods and generate a profitable source of income, empower and motivate local groups

to direct cross-cultural exchange in the way they wish and adopt practices which conserve, protect and

preserve the environment.

41. Local and regional Tourism Boards should be created, involving all stakeholders. These Boards

should:

· promote sustainable tourism concepts in co-operation with local governments and all

stakeholders, in line with Local Agenda 21 priorities;

· work systematically to attract investment in sustainable tourism;

· help other institutions in developing marketing strategies and training programmes and

developing educational materials;

· work together with different public institutions to involve all stakeholder groups in tourism

activities, and bring greater benefits to the entire community; and

· co-operate with grass-roots organisations to develop employment strategies through

sustainable tourism.

Agents and Partnerships for Change

Institutional Action

42. The UN-CSD should:

· invite countries to integrate tourism into their sustainable development strategies for the

2002 review;

· ask the review progress in local communities involvement in tourism development in their

country profiles to the preparatory meetings for Earth Summit III in 2002 as part of the

review process;

· instruct DESA in co-operation with relevant UN agencies and convention secretariats,

major groups and all stakeholders to develop indicators of sustainable tourism;

· invite convention secretariats and the Committee on the Environment of the WTO-OMC

to report annually to the CSD;

· establish an international “ombuds” office to deal with human rights abuses and

environmental destruction in tourism;.

· ask UNEP, through their Technology Industry and Economics Division, to work with

industry associations at all levels, trade unions, local authorities and NGOs to develop a10

framework for 'good practice' and to develop a database on good practice, criteria,

examples and analysis which should be accessible to governments and stakeholders alike;

· ask UNEP together with UNCHS, the Sustainable Cities Programme and relevant

stakeholders to develop guidance notes on tourism within Local Agenda 21.

· ask the UN Regional Commissions to prepare a report for the preparatory meetings for

Earth Summit III in 2002 on sustainable and community-based tourism activities within

their region and to work with UNEP/WTO to develop regional agreements to address

sustainable tourism.

· invite UNDP to share its work on guidelines for "good practice" and to involve indigenous

peoples and local communities this work;

· ask the UNDP country offices to bring together UN agencies, bilateral donors and other

stakeholders to work together on sustainable tourism, as well as involve the gender

development programme in this process;

· ask UNDP to include sustainable tourism into its poverty alleviation strategies and

programmes.

· ask the United Nations Conference on Trade and Development to integrate tourism into

their development strategies and include a progress review on the role of indigenous and

local communities' involvement in tourism for the Earth Summit III (year 2002) review,

and to support community-owned and controlled initiatives in tourism and bio-diversity

through its BIOTRADE initiative.

· invite environmental conventions and treaties secretariats to include community-based

tourism in their action plans and programmes, and to promote it as an incentive for the

conservation and sustainable use of bio-diversity.

43. Multilateral financing and assistance agencies should:

· provide funds for applied research through pilot projects to determine optimal mechanisms

for tourism development in a range of differing circumstances;

· create small-scale credit lines to assist small enterprises to invest in tourism without

excessive risk on personal property;

· support community controlled tourism initiatives that are directed to poverty alleviation,

bio-diversity conservation and promotion of human rights;

· assess their projects' effectiveness on local, sub-national and national levels involving all

stakeholders, and publish the results by the Earth Summit III in 2002;

· take part in a discussion forum on minimising leakage, with findings to be brought back

to the finance discussion at CSD-8 in 2000. Possible outcomes include the development

of a purchasing/procurement strategy for the tourism industry, local/ national investment

strategies, improved mechanisms for informed choice by consumers, and a linking of aid

with capacity building in tourism-dependent areas.

44. Governments should, at national level

· establish/clarify institutional and departmental responsibility for developing outgoing

tourism and harmonise institutional interventions;

· initiate the use of tourism for local economic development by involving all sectors

alongside the tourist ministry; to build the capacity to work at the destination level,

including product development and effective management of existing destinations;

· facilitate research grants on sustainable tourism, methodologies, impacts and analysis of

good practice; finance pilot schemes to develop 'good practice' and establish systems for

ongoing evaluation and monitoring;

· establish sustainable tourism policies and regulations, ensuring responsibly zoned

development; natural and cultural heritage and resource conservation and protection;11

· review land ownership in potential tourism areas and where possible transfer ownership

to local communities and provide the necessary training for them;

· include the perspective of local and indigenous communities into local and national

sustainable development strategies;

· increase funding for local NGOs to enable them to engage in a dialogue on tourism;

· support public education programmes which encourage responsible consumption, natural

resource use, environmental protection and local culture conservation;

· give priority to the following investment suggestions: create funds to help tour operators

improve their technical capacity for sustainable tourism development; create funds to

develop recreational facilities for the public;

· encourage local banks and other lending institutions to set up regional investment funding

programmes, including micro-credit programmes;

· create Regional Tourism Boards, fully staffed, to help in planning, promoting, regulating,

and expanding sustainable tourism;

· initiate special marketing programmes by local governments and Tourism Boards, in which

local tourism programmes will be advertised in the media;

· initiate programmes to improve the management of eco-tourism in protected areas;

· set up training programmes for guides, tour operators, marketers, etc.

45. Governments should, at local level

· harmonise laws on tourism including regulations, fee standards, licensing, etc. so that they

will be more favourable to sustainable tourism in the region;

· ensure that tourism development is in line with Local Agenda 21 priorities and land-use

plans and that the public can participate in local and regional decision making;

· regulate tourism to ensure that profits benefit local people and conservation efforts;

· Develop and support programmes to revitalise the diverse aspects of local cultures.

46. The tourism industry should

· reduce financial leakage and support local economies by buying food and resources locally,

develop long-term partnerships with local operators, businesses and suppliers;

· train and hire local staff and contract with local businesses, promote management

opportunities for women;

· prefer accommodations owned, built and staffed by local people, promote locally made

handicrafts and traditional products;

· encourage clients to study and understand their destinations, respect local cultures and

co-ordinate visits with local communities, authorities and women's organisations, being

aware of and being sensitive to local customary laws, regulations and traditions, whilst

respecting historical heritage and scientific sites;

· educate staff to avoid negative environmental and cultural impacts and create incentive

schemes to promote sustainable behaviour.

47. NGOs should:

· initiate stakeholder dialogue on community involvement in tourism development,

recognising social and gender divisions in communities;

· promote consultation processes in tourism planning, involving local communities;

· launch educational and awareness programmes on tourism for local communities, support

and promote history research and museums;

· promote the respect for indigenous peoples and local communities' self-determination,

autonomy and social and cultural integrity;

· strengthen their efforts to empower disenfranchised groups (in particular women) to12

become involved in local tourism planning and management;

· develop participatory programmes to support the integrity of local cultures and economies;

· support the sustainable resource use and initiate environmental actions on different levels

to conserve the environment while the tourism is developing;

· analyse the experience with sustainable tourism in different parts of the world, in order to

disseminate methodology/positive examples of community involvement in tourism;

· support the use of traditional knowledge, practices and innovation systems relevant for the

conservation and sustainable use of biological resources and promote actions on different

levels to eradicate poverty, protect human rights and conserve the environment while

working in tourism.

Possible Partnerships

48. There is an urgency to constructively shape tourism in order to support local development and

conservation goals. UN bodies and institutions, governments, industry and civil society should

co-operate to launch a dialogue process on sustainable tourism. This must be planned within the

framework provided by the various UN treaties and declarations. All the stakeholders involved in and

affected by tourism should be involved in the development of action plans for sustainable tourism.

Identifying mechanisms to achieve sustainable development goals in tourism must be a priority for

co-operation. 'Good practices' in conserving culture and nature while developing sustainable tourism

should be collected worldwide, involving all stakeholders. This process should lead to a

multi-stakeholder round-table on strategic planning of local community involvement in tourism to be

organised by UNEP as a side event at the Preparatory meetings for Earth Summit III in 2002.

49. There is an urgent need to assess the impacts of globalisation and the role of multilateral and

bilateral development organisations in unsustainable tourism practices. An independent international

assessment commission should be created under the CSD. NGOs, indigenous peoples, women's

organisations and local communities should be involved in this assessment process together with all

other stakeholders. The UN Working Group on Indigenous Peoples should be invited to monitor

impacts of tourism on indigenous peoples and local communities. The assessment is to be completed

and published by the year 2002.

E. Coastal Impact of Tourism

Problems

50. The United Nations Commission on Sustainable Development in 1999 will address both Oceans

and Seas and the review of SIDS. Therefore, it is recognising that: "The survival of small island

developing States is firmly rooted in their human resources and cultural heritage, which are their most

significant assets; those assets are under severe stress and all efforts must be taken to ensure the central

position of people in the process of sustainable development." With these words, the Report of the

Global Conference on the Sustainable Development of Small Island Developing States identifies the

single most important issue to be borne in mind as we address the challenge of survival and

development for our islands.

51. Article 25 of the Programme of Action from the United Nations Conference on the Sustainable

Development of Small Island Developing States (SIDS) focuses our attention on another significant

consideration: "Sustainable development in small island developing States depends largely on coastal

and marine resources, because their small land area means that those States are effectively COASTAL

ENTITIES"

52. Tourism is one of many anthropogenic activities with a special focus on coastal areas. The two

most popular locations for holidaymakers are the mountains and the coast. The coastal area or zone (as13

it is often called) is hard to define as the area where fresh and salt waters mix, containing many

complex, diverse and productive ecosystems on and offshore interacting with each other. New concepts

including the whole watershed area seem to be the best approach, especially when aquatic pollution

problems are considered. Most problems are related to conflicts between different uses and access

restrictions. Tourism leads to increased traffic flow and overcrowding in already densely populated

areas. Up to 130 tourists has been calculated per inhabitant in the most popular coastal regions.

Therefore, tourism adds substantially to the following pressures:

· Pollution by waste water, garbage, heating, noise and traffic emissions;

· Encroachment of buildings, facilities and roads close to the coastline;

· Beach erosion due to building, dune removal and dredging;

· Excessive use of natural areas;

· Destruction of natural areas to accommodate tourism or other needs;

· Inter-sectorial competition and conflict over (marine and terrestrial) space;

· Exclusion of local communities from any role of significance in decision-making;

· The loss of natural and architectural heritage in the face of rapid expansion;

· Strain on public utilities and facilities;

· displacement of local population;

· Creation of restricted exclusive zones that are off-limits to the local people;

· Loss of business by local enterprises as all-inclusive resorts supplies all the needs of their

guests.

53. Additional typical tourism impacts are socio-economic conflicts as property and general costs of

living increases, and social structure can be changed significantly, when summer guests overrun small

communities. Foreign customs and expectations can create conflicts and a deterioration of cultural and

regional values.

Solutions

54. A major focus should be on the integration of tourism planning and operation of tourist facilities

into local planning instruments. Local agenda 21 can play a key role here in ensuring the involvement

of all stakeholders. Ideally, this would be done in the context of integrated coastal area management

(ICAM). This instrument bridges sectorial approaches in order to avoid or mitigate user conflicts, and

it ideally takes into account ecosystem features and physical, not man-made borders. New tourism

developments should be planned together with municipal, industrial, agri- / aqua-cultural and nature

protection activities, to allow for multiple complementary uses and to segregate conflicting activities.

Area development plans should inform sector plans which should then be incorporated into a coordinated national development plan. All planning should be accompanied by widespread public

information dissemination and provide opportunity for discussion leading to integrated coastal zone

management. The tourism development strategy should protect local culture, respect local traditions

and promote local ownership and management of programs and projects, so as to foster community

stewardship of the natural resource base. Environmental Impact Assessment (EIA) on a strategic level

as well as for projects is an invaluable tool for this stage. Criteria for planning and EIA should be:

· Strict environmental standards for solid, liquid and gaseous waste emissions;

· Taking the integrity of coastal values and resources into account;

· Enhancement of public transport infrastructure (train, boat, bike, bus);

· Locally adapted styles and maximum height/size limit for facilities;

· Setting of local/regional carrying capacities on a case-by-case basis;

· Limits to sale of property to foreigners;

· Maintenance of public access to the coastal strip;

· Safeguarding cultural values and customary uses.14

55. During the operation of tourism facilities, several instruments can be applied to enable sustainable

development. The details have to be developed according to the use, and together with the local

community, the facility operator and local NGOs. Local Agenda 21 could play an important role here

(They will be different for a diving site than for a big hotel complex). Modern instruments, which

should be, and partly are, already applied in the tourism industry are:

· Introducing environmental management, (according to ISO 14.000 or the European EMAS

Initiative);

· Increasing cultural and nature awareness of guests through interactions with local

initiatives, guided nature walks, museums, etc.;

· Integrating the local economy by giving priority to local produce (e.g. fish, fruit, vegetables,

furniture, and building materials).

56. However, all these efforts will be in vain, unless carrying capacity limits can be agreed upon in a

dialogue and on a case-by-case basis. These limits have to follow sustainability criteria and have to

come out of discussions on the development objectives and the natural and cultural values to be

protected. They can be tiered in respect to nature used, number of beds and other facilities for guests,

and amount of property to be sold to foreigners. (But management efforts for sustainable development

cannot allow an ever increasing growth, which will destroy and, in fact already has, the resources the

guests have come to see and experience.) To diminish conflicts a better use of facilities over the year,

instead of only in a short season of two to three months should be aimed at. These limits probably have

to be stricter for "nature use". Here the introduction and implementation of ranger and guide systems

together with limits, regarding the number of visitors, can lead to increased awareness and control at

the same time. A simple example is the different approaches to beach litter: Instead of excessive beach

cleaning of all organic matter, a plastic litter clean-up by volunteers plus hands-on teaching on the biota

originally inhabiting the beach and its natural detritus (like algae and wood) could reinstate an

appreciation of nature.

57. We also believe that the recommendations for action at the national, regional and international

levels have been detailed in the SIDS Program of Action (1994), at the CTO Conference on Ecotourism in Dominica (1997) and more recently in the CEP Technical Report No. 38(1997) need to be

implemented.

Agents and Partnership for Change

Institutional Actions

58. Actions on several levels are necessary. First and foremost, the historically grown sectorial

approach to managing coastal issues, relating to tourism and other uses, has to be changed substantially.

Under the lead of one coastal agency, all stakeholders, especially local people and NGOs, and also

sectorial agencies, small and medium enterprises and industry representatives should meet regularly

to promote sustainable development of their coastal area. The planning process and the operation of

tourism developments should reflect the country's commitment to the guidelines set out in international

accords such as Agenda 21 and the SIDS Program of Action. Depending on the region, this could mean

enhancing human resource development including public awareness building and training; institutional

strengthening and networking. Lessons learned in one community should be accessible to others. This

will start the ICAM process, which is a goal-directed planning and decision- making process. ICAM

leads to inter-agency and inter-sectorial collaboration, resulting in operational decision-making with

strong public participation and feedback mechanisms. ICAM could mean in practice:

· To start an environmental management initiative through an award scheme;

· To raise an environmental tax from visitors for small projects, e.g. for funding ranger;

· Training or environmental training for tourism staff;

· To start joint actions with local fishermen, farmers, hotels, or other local initiatives;

· To develop a tourism master plan for the region.15

59. In the long term, a development plan should be devised and discussed thoroughly in order to

achieve a common understanding on the objectives and necessary restrictions. As all coastal areas

contain particularly sensitive sites, environmental protection has to feature strongly in this planning

process, with representatives from government nature protection agencies and NGOs having an equal

standing with all other participants. Depending on the nature of the coastline, regional and

intergovernmental collaboration may be necessary in addition to local initiatives. For some issues, such

as the reduction of pollution and especially “eutrophication”, co-operation on a larger regional scale

is necessary. Maybe the Baltic Sea States, consisting of very poor and rich states (can serve as example)

are co-ordinating their fight against pollution under the Helsinki Convention, funding projects in

neighbouring countries according to a list of hot spots. They have just finished the development of a

joint Agenda 21 for the development of the Baltic region, including tourism. Generally, national plans

should be converted into area development plans, which would provide the local context within which

enterprise-level proposals can be evaluated. All these plans should inform and be incorporated into

wider regional plans.

60. As integrated processes take time, tourism umbrella organisations should start with voluntary selfrestraint, until locally adapted objectives have been reached. In the north, which bears the brunt of

world-wide tourism, a development of quality tourism should be the focus for the future instead of an

increase in quantity. The term quality should include ecological and social carrying capacities at the

same time as being economically sustainable. In the south, tourism development objectives should be

developed according to the local needs. A specially developed Code of Conduct, taking into account

inter-area, the Coastal Code of Conduct by EUCC and the Berlin Declaration on Biological Diversity

and Sustainable Tourism, could lead the way. Environmental management should become a standard

of operation as well as social accountability thus leading to sustainable development.

Possible Partnerships

61. Additional to those partners mentioned above, there is a major role for environmental and social

NGOs to play. The involvement of local initiatives, heritage and nature protection organisations and

agencies can lead to a balanced ICAM process in the spirit of the Agenda 21.

62. Umbrella organisations, such as scuba diving, boating, and yachting associations should develop

and promote the application of codes of conduct focussing on environmental and sustainability issues

in their respective fields.

63. The Convention on Biological Diversity contains an ecosystem approach, which is consistent with

the ICAM logic. Its experts could sensibly focus on questions of nature use and ecological carrying

capacities for sensitive sites in order to obtain harmonised world-wide standards with legal standing.

64. The instruments and strategies are all already developed, now is the time to utilise and combine

them in local dialogue processes.

PPT Working Paper No. 12

Tourism in Poor Rural Areas

Diversifying the product and expanding the benefits in rural

Uganda and the Czech Republic

Jenny Holland, Michael Burian and Louise Dixey

January 2003 1

PPT Working Paper Series

9 Strengths and Weaknesses of a Pro-Poor Tourism Approach, Results of a Survey to

Follow-Up Pro-Poor Tourism Research Carried Out in 2000-2001, by Dorothea Meyer

10 Methodology for Pro-Poor Tourism Case Studies, by Caroline Ashley

11 Strategies, Impacts and Costs of Pro-Poor Tourism Approaches in South Africa by Anna

Spenceley and Jennifer Seif

12 Tourism in Poor Rural Areas: Diversifying the Product and Expanding the Benefits in

Rural Uganda and The Czech Republic, by Jenny Holland, Louise Dixey and Michael Burian

13 Coping with Declining Tourism, Examples from Communities in Kenya, by Samuel

Kareithi

14 Addressing Poverty Issues in Tourism Standards, by Dilys Roe, Catherine Harris and Julio

de Andrade

15 Improving Access for the Informal Sector to Tourism in The Gambia, by Adama Bah, and

Harold Goodwin

16 Tourism to Developing Countries: Statistics and Trends, by Dorothea Meyer, Dilys Roe,

Caroline Ashley and Harold Goodwin (forthcoming)

17 Outbound UK Tour Operator Industry and Implications for PPT in Developing

Countries, by Dorothea Meyer

These working papers, produced under the title 'Lesson-Sharing on Pro-poor Tourism', are the result of a collaborative

research project carried out by the PPT Partnership. The PPT partnership is comprised of Caroline Ashley (ODI),

Harold Goodwin (ICRT) and Dilys Roe (IIED). They are funded by the Economic and Social Research Unit (ESCOR)

of the UK Department for International Development (DFID). 2

Contents

1 Introduction ................................................................................................................................3

2 Importance and challenges of tourism in rural areas.............................................................5

3 Different approaches to rural tourism .....................................................................................9

3.1 Agri-tourism, farm tourism and rurally-located tourism......................................................9

3.2 Policy motives: rural growth, tourism product development.............................................10

3.2.1 Rural tourism as a motor of growth .......................................................................10

3.2.2 Rural tourism to enhance or protect the tourism product.......................................11

4 Promoting rural tourism in the Czech Republic ...................................................................12

4.1 Tourism economics and policy post 1989..........................................................................12

4.2 The context of a transition economy ..................................................................................13

4.3 Initiatives to develop rural tourism ....................................................................................14

4.3.1 An initial project to lay the groundwork................................................................14

4.3.2 Heritage Trails (HT)...............................................................................................15

4.3.3 Materials and standards for rural tourism products ...............................................17

4.4 Progress, challenges, impacts, and critical factors .............................................................18

4.4.1 Progress and challenges .........................................................................................18

4.4.2 Key obstacles and ingredients of success ..............................................................21

5 Development of rural tourism through Heritage Trails in Uganda ....................................23

5.1 Background: tourism trends; policy and rural tourism objectives .....................................23

5.2 The Heritage Trails Initiative .............................................................................................24

5.3 Progress, challenges, impacts and key factors ...................................................................28

5.3.1 Progress and challenges .........................................................................................28

5.3.2 Obstacles and success factors ................................................................................31

6 Implications for Developing Rural Tourism..........................................................................33

6.1 Key Issues...........................................................................................................................33

6.2 Can rural tourism contribute to poverty reduction? ...........................................................35

References .........................................................................................................................................37

List of Tables

Table 1: The gap between requirements of tourism and characteristics of rural areas ........................7

Table 2: Growth of Tourism in the Czech Republic 1991–2000 .......................................................13

Table 3: Number of guests identifying accommodation through ‘A Countryside Holiday

Guidebook’...........................................................................................................................18

Table 4: Community associations and attractions on the Kabaka‘s Trail..........................................26

Table 5: Heritage Trails Uganda Project Activities ...........................................................................26

List of Boxes

Box 1: ECEAT CZ – European Centre for Eco Agro Tourism..........................................................12

Box 2: Heritage Trails ........................................................................................................................16

Box 3: Making a Heritage Trail .........................................................................................................17 PPT Working Paper 12 Tourism in Poor Rural Areas

3

1 Introduction

As many as 75 per cent of the world’s poor live in rural areas

1

,Top tourism destinations .

particularly in developing countries, include national parks, wilderness areas, mountains, lakes, and

cultural sites, most of which are generally rural. Thus tourism is already an important feature of the

rural economy in these specific sites. It is self-evident that tourism will never come to dominate all

rural areas, particularly in the developing world – there are vast swathes of rural areas for which

tourism is not relevant for the foreseeable future. Between these two extremes are poor rural areas

with some tourism potential, and an urgent need to develop whatever economic potential they have.

Thus, an important question is whether more can be done to develop tourism within such rural

areas, as a way of dispersing the benefits of tourism and increasing its poverty impact.

The aim of Pro-Poor Tourism (PPT) is to increase the net benefits to poor people from tourism, and

increase their participation in managing the tourism product. If more tourism can be developed in

rural areas, particularly in ways that involve high local participation in decisions and enterprises,

then poverty impacts are likely to be enhanced. The nature of rural tourism products, often

involving small-scale operations and culturally-based or farm-based products, can be conducive to

wide participation. Tourism can also bring a range of other benefits to rural areas, such as

infrastructural development and spin-off enterprise opportunities. This paper thus assumes that

strategies to further develop rural tourism can be one part of a pro-poor tourism agenda.

However, developing rural tourism has its challenges. Any successful tourism development,

whether pro-poor or not, depends on commercial, economic, and logistical issues, such as the

quality of the product, accessibility and infrastructure of the destination, availability of skills, and

interest of investors. In most of these aspects, rural areas may well be at a disadvantage compared to

urbanised and more developed areas. These challenges may be compounded by political and

institutional obstacles, particularly in developing countries, i.e. the administrative complexity of

dealing with low-populated areas, the lack of policy co-ordination between rural development and

tourism development, and low priority provided to rural areas by central governments. Thus, ways

to deal with these challenges are needed.

Rural tourism takes many different forms and is pursued for different reasons. There are

developmental reasons to promote tourism as a growth pole such as for regeneration following

agro-industrial collapse, or diversification of a remote marginal agricultural area into adventure

tourism or cultural tourism. Other reasons relate more to development of the tourism product such

as diversifying a country’s image, or alleviating bottlenecks in popular sites. There are big

differences in approach between Eastern Europe and Africa (the two areas of focus in this paper)

due to their economic legacy and context. But in both, rural tourism is seen as one means to assist

rural economies with the transitions they are facing in order to thrive in a more liberalised economy.

The purpose of this paper is to explore strategies for expanding tourism in poor rural areas. It draws

on an overview of the likely challenges and motivations involved in promoting rural tourism, and

on two new case studies from the Czech Republic and Uganda, complemented by insights from

other rural tourism initiatives elsewhere. It does not focus on rural tourism at well-established or

high-value sites (such as gorilla habitat, famous mountains or reserves), but on bringing tourism

into wider rural areas.

1

IFAD (2001:15) estimates that 75% of the 1.2 billion people living on less than one dollar a day live and work in rural areas.PPT Working Paper 12 Tourism in Poor Rural Areas

4

Section 2 outlines the importance and likely obstacles of rural tourism, thus sets out the key

challenges on which practical lessons are needed. The paper does not seek to provide a

comprehensive review of international experience of rural tourism approaches, but Section 3 briefly

provides some key background on different types of approaches, thus providing distinctions and

definitions for the discussion. In particular, it outlines the differing context for rural tourism

strategies in Eastern Europe and sub-Saharan Africa.

Section 4 reviews initiatives in the Czech Republic to establish Heritage Trails, focusing initially on

Southern and Northern Moravia, while Section 5 reviews the development of cultural sites and trails

in Ugandan villages in the traditional kingdom of Buganda. The motivations, institutional

processes, practical steps, progress and obstacles are identified. The final section returns to the

themes of challenges and strategies in order to identify useful lessons for pro-poor tourism

strategies more generally. This paper does not provide an economic and social impact assessment of

the development of rural areas into a tourism destination. While such an assessment is urgently

needed, considerable new research is required to inform it

2

.

2

This is an important gap in our knowledge of rural tourism and pro-poor tourism. Most assessments of the impact of tourism in the

development literature focus either on the macro level (for example at national level on contribution to foreign exchange or total

employment), or on the micro level (for example, impacts of one lodge or one enterprise). Given that the ‘destination’ is the key level

at which development takes place and impacts are maximised in tourism, destination level assessment is needed to understand

poverty impacts. PPT Working Paper 12 Tourism in Poor Rural Areas

5

2 Importance and Challenges of Tourism in Rural Areas

Rural areas are heterogeneous. The definition of a rural area is problematic in the literature – most

people know a rural area when they see one, but few agree on a definition in a few sentences.

Debates aside, common features of rural space are (Ashley and Maxwell 2001):

• spaces where human settlement and infrastructure occupy only small patches of the landscape,

most of which is dominated by fields and pastures, woods and forest, water, mountain and

desert

• places where most people spend most of their working time on farms

• abundance and relative cheapness of land

• high transaction costs, associated with long distance and poor infrastructure

• geographical conditions that increase political transaction costs and magnify the possibility of

elite capture or urban bias

For the purposes of this paper, key features that make rural areas relevant to pro-poor tourism

development are their poverty and lack of economic opportunity, combined with the agricultural

and/or scenic and/or cultural nature of the area, which provides a tourism asset.

The aim of ‘pro-poor tourism’ is to increase the net benefits to poor people from tourism, and

increase their participation in the development of the tourism product. From this perspective, there

are three main reasons why it is important to develop tourism in rural areas:

i. Increase participation of the poor in the development of tourism

While the percentage of poor people in urban areas is increasing, there are still more in rural

areas

3

, both in total numbers as well as a proportion of the population. One key opportunity of

involving more of the poor in tourism is to develop tourism enterprises where they live. This is

not to say that the poor will necessarily own an enterprise, or even provide the labour, just

because it is located in a rural area, but location is a first step. Furthermore, two strengths of

tourism for increasing participation are that a) because the customer comes to the product (not

vice versa), there are more opportunities for expanding the range of transactions; and b)

tourism usually involves a wide range of enterprises, i.e. the small and informal as well as the

well-established or multi-national (Ashley, Goodwin and Roe 2001). One advantage specific

to rural tourism is that the nature of the product often involves enterprises that feature local

ownership such as bed and breakfasts (B&Bs), home visits and farm stays.

ii. Bring wider benefits to rural areas

Rural areas generally suffer high levels of poverty, and are also characterised by lower levels

of non-farm economic activity, infrastructural development, and access to essential services.

They may also suffer from depopulation of the able-bodied

4

, and lack of political clout.

According to Gannon (1994) and Kieselbach and Long (1990) the development of tourism can

help address several of these problems through:

3

Although poverty is becoming urbanised, it is estimated that the majority of the poor of developing countries will be in rural areas

until at least 2020. IFAD projects that over 60% of the poor will be rural even in 2025 (IFAD, 2001: 15)

4

Depopulation refers to young, skilled workers moving out, to leave a largely unskilled, elderly population in the rural area. It is a

critical issue in much of Eastern Europe, and in many sub-Saharan African countries. PPT Working Paper 12 Tourism in Poor Rural Areas

6

• economic growth, economic diversification and stabilisation;

• employment creation, as primary source of income but most importantly secondary source

of income;

• reduced out-migration and possibly re-population;

• maintenance and improvement of public services;

• infrastructural improvements;

• revitalising crafts, customs and cultural identities;

• increasing opportunities for social contact and exchange;

• protection and improvement of both the natural and built environment;

• increasing recognition of rural priorities and potential by policy-makers and economic

planners

5

.

iii. One option among few

Manufacturing industry gravitates to areas with good transport links, infrastructure, and

commercial skills. Rural areas usually have few sources of comparative advantage for

attracting economic activity other than agriculture or industries based on harvesting natural

resources (mining, forestry) (Wiggins et al. 2001). Tourism is one of the few sectors that can

be suitable to remote or non-urban areas, provided that there is sufficient access for tourists.

Because there are few other options, its value to the poor can be particularly high

6

.

As outlined in the next section, the combination and form of these different benefits varies

enormously between places. However these and other reasons mean that expanding tourism into

new rural areas can make policy sense. There are also practical reasons why doing so may appear to

be a relatively ‘easy’ option. The nature of rural tourism products and clientele may mean that

relatively basic facilities suffice, which are easier to develop than high quality resorts. There may

well be assets in rural areas (man-made structures, culture, nature) that can be readily adapted for

tourism development.

Tourism development can also have negative impacts on residents. In rural areas, displacement of

people from their land and competition for other natural resources such as water, forest, and wildlife

are likely to be the key trade-offs. Pro-poor strategies should therefore focus on minimising

negative impacts as well as exploiting potential benefits.

However, any assessment of the key features of successful tourism development, and the key

characteristics of rural areas leads to the hypothesis that developing tourism in rural areas faces

major obstacles. Table 1 lists some of the requirements of tourism, and shows how rural areas may

be less likely than urban areas to be able to meet most of them.

5

Nicanor (2001), reviewing community-based tourism in Namibia identifies that community based organisations play a vital role in

lobbying and advocacy, thus providing a voice for marginalised groups. The low political priority afforded to rural areas may be

more of a problem in developing countries, where farming has traditionally been taxed to support the urban classes and modern

sectors, than in Europe, including Eastern Europe, where rural and agricultural issues often gain considerable political support.

6

As identified in earlier PPT case studies in Amazonian Ecuador ( Braman and Fundación Acción Amazonia 2001) and Namibia

(Nicanor 2001). PPT Working Paper 12 Tourism in Poor Rural Areas

7

Table 1: The gap between requirements of tourism and characteristics of rural areas

Common requirements for tourism

development

Common characteristics of rural areas

• A product, or potential product • Variable. May have a high-value unique selling

point, may be an attractive desired location for

travellers from cities, may have little to offer.

• Access – transport infrastructure, limited

distance, limited discomfort

• Distant from cities, poor roads, few

trains/buses/planes

• Investment in facilities • Limited access to financial capital, affordable

credit and private investment.

• Skills in service, hospitality • Low skills (skills migrate)

• Regular and quality inputs, e.g. of food

and other supplies

• Undeveloped commercial production, distant from

markets

• Marketing skills • Distant from marketing networks

• Clustering of tourism products to create a

‘package’ holiday

• Lower concentration of tourism products in one

place

• Government investment • Low priority for governments, particularly

tourism/trade ministries, particularly in subSaharan Africa

While it is possible to highlight a number of obstacles that are common to rural areas, this is not the

case when considering the tourism attraction itself. Some rural areas have such strong products,

such as mountain gorillas, well-endowed wildlife areas, stunning wilderness, that the quality of the

product can compensate for other problems, and act as an incentive for the industry and tourists to

overcome them. Others areas, however, may be characterised by vast expanses of agricultural land

(perhaps marshy or highly arid), be topographically featureless, and lacking distinctive cultural

and/or historical features. These areas are unlikely to develop a successful product even if the other

obstacles are addressed, unless a well-resourced private or public investor spots an opportunity

7

.

But for many rural areas, developing rural tourism will require a combination of developing an

attractive product, and overcoming the other challenges, such as accessibility and availability of

skills. Good marketing and fast transport links can turn a pleasant area into a popular short-break or

excursion destination.

Most of the obstacles listed above are commercial, economic and logistical. They can be addressed

through investment of time and resources, although it cannot be done everywhere. However the

institutional and political problems are important to note, as they can assume great importance in

rural areas. Although tourism today is generally a private-sector industry, a degree of government

support, in terms of investment, appropriate regulation and marketing, can be key. In some

countries rural tourism is already well recognised by policy makers as an important economic

strategy. In others, particularly in Africa, support for tourism in rural areas may be limited because:

• Where tourism is planned within a tourism ministry, or a tourism and wildlife ministry, the

institutional mandate is likely to be in expanding the national tourism product, rather than

the growth potential of poor areas. Thus the focus is more likely to be on attracting

investment, developing the main destinations, marketing them, and often also on data

gathering. If the policy objective is expansion of tourism investment and arrivals,

particularly of international tourism, the fastest returns may come from a focus on existing

resorts and urban areas, where tourists, assets and skills are concentrated. That said, there

7

It is not impossible to develop a standard area, or even an unattractive one, into a product with sufficient investment. Sun City, the

most popular resort in South Africa, is a ‘creation’. Cancun was built in a mosquito–infested swamp. While these attractions receive

large amounts of visitors, i.e. 40% of international arrivals to Mexico visit Cancun, they are exceptional and highly geographically

concentrated developments. PPT Working Paper 12 Tourism in Poor Rural Areas

8

may be commercial reasons to invest in rural products, such as product diversification, or

political pressure to expand economic impacts to poor areas (see Section 3).

• Rural development planners and extension workers are unlikely to focus on tourism, which

is entirely alien to their agriculturally-focused professional training

8

.

• Lack of communication between government departments, or inconsistencies between

policies, that occur in the capital city can be greatly magnified in rural areas. Administrative

boundaries, reporting structures and mandates can impede collaboration.

• Rural areas may have little political priority across government offices, not just in the

tourism ministry. Given the added costs of investment in rural areas, and the lower per

person returns given lower population density, a policy to redistribute resources to rural

areas is likely to require a strategic political choice (Start 2001).

• Even if political will is sufficient, there are administrative challenges to making things

happen in rural areas given lower population densities, poorer infrastructure, more junior

government staff, lower levels of skills and commercial activity.

The situation may be quite different in some countries, particularly in Europe, where tourism is

more often under the Ministry for Economic Affairs, and where the main mandate is 'growth' in

addition to the other cornerstones of economic development. At the same time tourism planning and

development in rural areas often falls within the Ministry for Rural Affairs, or under decentralised

government bodies (Federal States, Counties) which combine rural planning and tourism planning.

Thus while the National Tourism Boards have a marketing mandate, planning happens elsewhere

with a clearer growth and/or rural development focus.

Thus in reviewing the experience of the Czech Republic and Uganda, the paper aims to identify

how the different institutional, commercial, and logistical challenges have been dealt with, and how

the various benefits have been pursued. More specifically, several advantages of, and challenges to,

rural tourism have been hypothesised. Have these advantages and challenges been encountered in

the case studies? Given that at this stage we can learn more about the process than the impacts, key

questions to ask of the case studies are how they have dealt with potential obstacles and how they

have:

• developed the rural product

• ensured sufficient quality of facilities and inputs

• developed marketing capacity and increased visitor numbers

• dealt with other practical challenges such as accessibility of transport, availability of credit or

investment

• built institutional capacity and sufficient political support to resource and develop rural tourism

8

A case study from the north of Selous Game Reserve, in Tanzania, argues that wildlife tourism and its contribution to rural

livelihoods is below potential, partly due to lack of articulation between those with tourism, rural development and conservation

mandates (Ashley, Mdoe and Reynolds 2002 ). PPT Working Paper 12 Tourism in Poor Rural Areas

9

3 Different Approaches to Rural Tourism

This section makes some distinctions between different types of rural tourism and policy objectives

relating to them. It lays the basis for understanding the objectives and contribution of the two case

study initiatives, taking place in the different contexts of Eastern Europe and sub Saharan Africa.

3.1 Agri-tourism, farm tourism and rurally-located tourism

Rural tourism can be taken to mean farm tourism or agri-tourism, but both are sub-components of

tourism in rural space:

• Agri-tourism is when the purpose of the visit has a specific agricultural focus such as being with

animals, enjoying a vineyard.

• Farm tourism is when accommodation for rural tourists is provided on farms. The core activity

is in the wider rural area (walking, boating) but the vast majority of visitors are accommodated

on farms, either working farms or farms converted to accommodation facilities.

• Rural tourism, or rurally-located tourism, can include the above but also campsites, lodges,

safari drives, craft markets, cultural displays, adventure sports, walking trails, heritage sites,

musical events indeed any tourist activity taking place in a rural area.

In Europe, farm tourism plays an important role in rural tourism. For example, in some rural areas

in East Germany (an example being Wittow on the island of Rügen), 80 per cent of accommodation

is provided by working farms or farms that have been converted to accommodation facilities. In

African rural areas there are some commercial guest farms and the emerging equivalent of home

stays in traditional huts, but tourists often stay in purpose-built tourism accommodation (from

luxury lodges to campsites) while visiting rural areas.

There is evidence that farm tourism generates proportionately higher benefits than other tourism

using purpose-built accommodation in a similar area

9

However, the relative benefits and also the .

costs of adapting farms for tourism purposes have often been evaluated incorrectly. The investment

required to upgrade facilities can be high, and so can the marketing investment to service a number

of fragmented non-experienced part-time entrepreneurs. Returns can be low given low occupancy

rates and high seasonality.

Poland’s experience since the early 1990s provides a case in point: rural farm-based tourism was

seen as a cheap form of tourism that would utilise existing spare capacities in farm houses and

small, unsophisticated catering facilities. However, investment needed was grossly underestimated

(McMahon 1996), given that tourists demand creature comforts including adequate sanitary

facilities. This was a high investment burden for generally small-scale farmers. Furthermore,

marketing costs and the set-up of marketing networks co-ordinating a large number of small-scale

entrepreneurs were added expenditures that were initially not foreseen. As a consequence farm

tourism was far from a cheap option as was initially thought. Although rural tourism in Poland is

thriving, the government has realised that the returns are very low and that a main constraint is the

large number of small-scale stakeholders that need to be co-ordinated and marketed (MacMahon

1996).

9

A study by Slee, Farr and Snowdon (1997) analysed the impacts of soft tourism (tourism accommodation provided by locals in for

example farms) and hard tourism (accommodation provided by externals such as time-share companies) on the local rural economy

in Scotland. They found that a much higher proportion of expenditure remains locally or in surrounding areas when soft tourism

providers are used (68.5% of expenditure), compared to hard tourism providers (only 25.3% of expenditure remains in the local or

extended area). PPT Working Paper 12 Tourism in Poor Rural Areas

10

3.2 Policy motives: rural growth, tourism product development

3.2.1 Rural tourism as a motor of growth

Strategies to use tourism as a motor of growth in rural areas emerge in different contexts. They are,

at heart, about enabling rural producers to reduce reliance on agriculture, and engage in new

economic opportunities that are competitive in the more globalised markets, which now reach their

doorstep (or farm gate). In Eastern Europe, the emphasis has been more on tourism as a tool for

rural regeneration following agricultural collapse, while in Africa, the emphasis is more on

diversification of under-developed areas.

Regeneration in the face of agricultural decline

In Europe, tourism has long been considered a catalyst for regeneration of rural areas, particularly

where traditional agrarian industries are in decline (Williams and Shaw 1998, Hoggart, Buller and

Black 1995). Studies of rural tourism are predominantly set within a European (including Eastern

European) or North American context, focusing largely on domestic visitors and economic

restructuring. Farm facilities and infrastructure (such as basic transport) are in place, thus the

strategy is to adapt them for tourism purposes, market the rural attractions, and draw clients,

particularly domestic visitors, from the cities. There is evidence that in Europe rural tourism has

made important contributions to rural incomes both at the level of the individual farmer and more

widely in the local community (ETB 1991). While not necessarily substituting for agricultural

income, it has delivered supplementary income and inter-sectoral linkages.

This approach to rural tourism has received priority attention in Eastern Europe since the fall of the

iron curtain and the collapse of communism. The need for rural regeneration has been immense. In

the early 1990s countries in Eastern Europe needed to respond quickly to previously unknown

circumstances: high levels of industrial closure, a loss of Soviet-controlled markets, break down of

the non-competitive and over-staffed agricultural sector and consequently high unemployment,

price inflation and diminishing living standards. High unemployment due to privatisation of largescale agricultural co-operatives, coupled with a new freedom to move to urban centres severely

depopulated rural areas. At the same time the level of domestic travel was seriously reduced due to

financial constraints, a thirst for the outside world, and loss of financial subsidies for previous forms

of 'social' tourism. Interregional travel, on which former Eastern Bloc countries depended heavily,

was reduced to a minimum.

At the same time, interest by Western visitors in previously unseen countries and attractions

increased drastically. The early 1990s were characterised by large-scale, short-stay tourism,

especially from Germany, to formerly closed-off countries such as the Czech Republic. Although,

the overwhelming demand was initially for urban destinations, such as Prague, rural tourism made

sense since Eastern Europe is generally more rural than Western Europe (in terms of levels of

urbanisation, and socio-cultural characteristics). Rural areas in the East should be able to offer an

appealing product to the West if appropriately developed and promoted. Furthermore, rural areas

were in dire need of regeneration and means to operate in a market economy.

Rural diversification of under-developed areas

In developing countries, the language of policy-makers focuses more on diversification than

regeneration of the rural economy. In this context, the problem is not so much the structural

collapse of agriculture, but the insufficiency of agricultural livelihoods, and the search for new

sources of growth and economic opportunity. Smallholder farming is facing growing constraints PPT Working Paper 12 Tourism in Poor Rural Areas

11

(both in terms of local resource base and international competitiveness, Ashley and Maxwell 2001)

and cannot meet the needs of a growing population. The last decade has seen consensus that social

investment alone cannot reduce poverty, and that growth is essential. This applies equally to rural

areas, despite their lower comparative advantage; thus attention is crystallising on the dilemmas of

how to promote the non-farm rural economy (Start 2001).

In this context, tourism is promoted as a new activity, which is supplementary to agriculture.

Although building on existing assets where possible, it is not a matter of simply switching existing

infrastructure to a new purpose. New assets and infrastructure are invariably needed. Tourism is a

means of bringing the concomitants of economic development (infrastructure, communications,

services) to an under-developed area. There are of course some rural areas that have already been

transformed into ‘destinations’, sometimes involving depopulation of large parts in the process: e.g.

in Africa, the Massai-Mara in Kenya, the Ngorongoro Crater in Tanzania, the Okavango Delta in

Botswana and Kruger National Park in South Africa are well-known examples.

3.2.2 Rural tourism to enhance or protect the tourism product

Tourism development planners may share the growth objectives outlined above, or may be subject

to increasing political pressure to show their contribution to them. Even where tourism is run by a

separate ministry with its own agenda, demonstrating and expanding the impact of their industry

can be an important goal. A tourism ministry will have to demonstrate its contribution to national

development plans and to poverty targets, to compete for scarce government resources.

In addition, there are other reasons for promoting rural tourism that relate to development of the

tourism product, and this is quite different to the poverty-rooted objectives of promoting rural

development. These are nevertheless important motivations to understand as they influence wider

institutional support for rural tourism.

Enhancing the tourism product

An important objective for tourism planners is to diversify the tourism product (e.g. the

development of culture, adventure tourism) with the aim to encourage visitors to stay longer and,

ideally, spend more, and/or to develop a more distinguishable destination identity. These ‘new’

features of the rural product can provide the basis for a revised marketing programme (for example

bird-watching in Uganda). Such niche products may well be promoted in quite isolated rural areas,

sold as ‘off the beaten track’ rather than the more developed agricultural areas. Or they may be

proximate to cities and resorts, in order to provide add-on excursions. Thus they have relevance to

different types of rural areas.

Dispersion to protect tourism assets

Another objective of tourism managers, and one shared by conservation professionals, may be to

disperse tourists away from existing ‘honeypots’. There may be many good reasons to encourage

concentrations of tourism activity in one area – such as to limit negative impacts spreading more

widely, to take advantage of economies of scale, or optimise different land uses. But at times it

becomes necessary to take pressure off key sites, particularly if resources are being over-used or if

limits to capacity in peak season are being met. This requires dispersing tourists geographically,

including into surrounding rural areas. PPT Working Paper 12 Tourism in Poor Rural Areas

12

4 Promoting rural tourism in the Czech Republic

This section looks at initiatives undertaken by a non-governmental organisation to develop rural

tourism in the Czech Republic, in a fairly non-supportive policy environment. While the scale of

rural tourism resulting is fairly small so far, the process highlights many of the institutional and

practical challenges, with particular reference to a post-communist transition economy.

4.1 Tourism economics and policy post 1989

The early 1990s produced a boom in tourism for Prague, as the city’s architecture and rich culture

were ‘rediscovered’ by Western Europeans curious to visit a country formerly hidden behind the

Iron Curtain. The country’s struggle during the Prague Spring in 1968 and its charismatic leader,

Vaclav Havel’s role in that struggle, increased the fascination of the city as a tourist destination. As

a result, Prague became a synonym for the Czech Republic and the tourism boom brought US$ 4

billion per annum to the state budget (Czech Tourist Authority 2000) with almost no marketing and

promotion. While tourism revenue generated by Prague has been estimated at 60 per cent of total

Czech tourism earnings, the city captures over 80 per cent of the total earnings since many

companies are registered in Prague, although operating elsewhere.

In the early 1990s, tourism was the responsibility of the Ministry for Economic Affairs with the

overriding objective to facilitate economic development. Little attention appeared to be paid to

strategic development of a long-term, comprehensive tourism policy. Although the Czech Tourist

Authority was established, its budget was relatively limited, less than US$ 400,000 per annum. A

proposal made to the Ministry for Economic Affairs by the European Centre for Eco Agro Tourism

(ECEAT CZ) to develop alternative forms of tourism in rural areas was rejected on the basis that

‘alternative’ tourists were not ‘big spenders‘ and this would therefore not be an economically viable

market segment to develop (ECEAT CZ).

Box 1: ECEAT CZ – European Centre for Eco Agro Tourism

ECEAT CZ is an independent, non-profit, non-governmental Czech organisation. ECEAT CZ is a member of

the Europe-wide ECEAT network, ECEAT International

ECEAT CZ’s main aims are:

• to support sustainable rural development through small-scale, environmentally-friendly tourism

• to create new job opportunities for village people

• to enhance the experience and knowledge of village entrepreneurs (education, information, materials,

quality control etc.)

(source: www.eceat.org)

During the 1990s, the structure of tourism to Prague changed considerably. The first boom of

curiosity gave way to the cheaper end of the market, i.e. cheap package deals and student trips. At

the same time competition from other Eastern European destinations such as Budapest increased.

Although the number of inexpensive package arrivals continued to increase, total visitor numbers

started to decrease marginally by the late 1990s, and total revenue declined markedly. Coupled with

the increasing costs of maintaining and developing infrastructure, the ‘Prague product’ began to

falter. Table 2 illustrates the impressive growth (in terms of arrivals and income) until 1996

followed by a subsequent decline. PPT Working Paper 12 Tourism in Poor Rural Areas

13

Table 2: Growth of Tourism in the Czech Republic 1991–2000

1991 1992 1993 1994 1996 1998 2000

Foreign arrivals (million people) 51 69 72 101 109 103 104

Foreign exchange income ($US billion) 0.7 1.1 1.6 2.0 4.1 3.7 2.9

Source: Ministry of Regional Development, Tourism in the Czech Republic and Czech Tourist Authority, Annual

Report 2000

Notes: 1.Comparable statistics for years before 88-90 are not available 2. Tourists account for approx 50% of total

arrivals. 3. 1993 Czech and Slovak Republic separated

With problems emerging in Prague, and the European Union (EU) focusing on the economic

development of rural areas, the attention given to rural tourism increased towards the end of the

1990s. The ‘National Development Plan’ developed for the EU accession agenda, included a plan

for countryside development (‘Programme for Countryside Renewal’). One of the EU funding

criteria was that projects proposed under this plan had to be submitted by villages associations.

Most funding was directed towards basic infrastructure, e.g. sewage reconstruction. Tourism

development was initially just a small part of this programme, with cycle tracks being the main type

of investment. Other more immediate priorities dominated, and a lack of access to credit to renovate

or build new accommodation meant that small-scale tourism entrepreneurs were discouraged from

participating in the programme. Nevertheless, tourism was one element of the Countryside Renewal

Plan and since 2000 there has been an increasing trend to develop new products, in addition to

improving infrastructure. Furthermore, since 1996 theresponsibility for tourism development moved

from the Ministry of Economic Affairs to the Ministry for Regional Development.

4.2 The context of a transition economy

Prior to the collapse of communism, the service sector (and hence the tourism industry) in the

Czech Republic was weakly developed. The universal right to work, common to all ex-communist

countries, favoured employment in heavy industries and/or collective agriculture. Neither private

ownership of enterprises nor NGO activity was permitted.. As in the rest of Eastern Europe, since

the fall of the Iron Curtain in 1990 the economy underwent rapid transition, most notably the

collapse of the primary sector and consequently rising unemployment. Between 1980 and 2000, the

contribution of secondary industries to the GDP fell from 63% to 43%, while the contribution of

tertiary industries increased from 30% to 53% (EBRD STAS).

For rural workers access to new forms of employment was hampered by the reduction, or absence,

of previously subsidised transport. Even with new foreign investment, salaries remained low with

the additional burden of non-subsidised transport costs. For many, paid employment offered lower

remuneration than unemployment benefits. This lead to resentment and frustration in rural areas.

In Hungary, the most open of the Eastern Bloc countries in the 1970s and 1980s, a basis for tourism

and entrepreneurship had already been laid. Despite the general collectivist ideology of

communism, in some sectors of the economy, including tourism, individual ownership and

entrepreneurship were permitted under 'market socialism'. Foreign investment, ownership, and joint

ventures were allowed, and western tourism facilities were developed. As a result, the country

emerged as one of the leading destinations for West Europeans in the 1990s.

The Czech experience has been very different, resulting in two different but important implications

for tourism development. Firstly, there was no basis of private entrepreneurship in tourism. Private

ownership was not permitted during the ‘communist’ years, leading to the absence of

entrepreneurial skills and also the complete lack of private investment capital. Thus, the creation of

local quality products became a challenge. Secondly, there was a very strong feeling against the PPT Working Paper 12 Tourism in Poor Rural Areas

14

notion of ‘partnerships’, or working together as embodied in collectivism, in the Czech Republic

when the Soviet control broke up. New found, and permitted, individualism, a new competitive

environment, and the legacy of state control using fellow citizens, lead to an initial distrust of both

fellow members of society and the state. Degrees of mistrust also had particular implications for

rural tourism, given the co-ordination issues that emerge in product development and marketing.

Rather than collaborating on product development and marketing, the neighbour was seen as the

‘competitor’.

4.3 Initiatives to develop rural tourism

Despite the Ministry of Economic Affairs’s initial rejection, ECEAT CZ decided to continue to

push for the development of tourism in rural areas. Since 1995, four different (though overlapping)

approaches have been taken to achieve this:

• An initial programme from 1995 to 1998, ‘Tourism at the Service of Rural Development’

(TSRD) to start building capacity, skills and products;

• A project to develop ‘Heritage Trails‘ in rural areas, from 1998 to 2000;

• Production of a rural tourism guidebook and other materials;

• On-going political engagement, including further expansion of the Heritage Trail materials and

approach.

4.3.1 An initial project to lay the groundwork

Tourism at the Service of Rural Development (TSRD) started in 1995 and had three sub-themes:

Institutional Capacity, Training in Tourism Skills and Product Development.

Institutional capacity: The first step in the project was to develop an understanding of the needs,

strengths and weaknesses of all potential partners (government, private sector and civil society) in

implementing a long-term tourism strategy. Capacity building was carried out in five regions, all of

which were later to develop Heritage Trails. This involved a series of one-day motivational

seminars

10

exploring the potential for partnerships between local governments, entrepreneurs and

NGOs. This focused on the understanding of potential mutual benefits arising from joint action, and

hence changing attitudes towards adopting sustainable rural tourism development. The seminars

formed the basis for co-operation and supported the Heritage Trails initiative when it started in

1998.

Training in tourism skills was initiated to serve two aims, a) to increase the quality of service

provision and b) to raise tourism awareness. It was felt that residents of Czech villages were both

suspicious towards outsiders and as well as unaware of the tourism potential of their surroundings,

and thus uncertain about proposed tourism developments. Furthermore, participating in democratic

decision-making processes was alien to many villagers due to the previous political context and

structures. ECEAT CZ’s initiative involved a skills development programme which included group

work, training and the publication of the book ‘Jedou k nám hosté’ (‘Guests are coming! or the

guide to becoming a rural tourism entrepreneur’) describing the experiences of entrepreneurs who

had been successful in their sustainable tourism activities. One-day seminars for beginners were

financed by local or district governments.

10

Financed by Prince of Wales Business ForumPPT Working Paper 12 Tourism in Poor Rural Areas

15

Training focused not only on standards for accommodation and service provision but also on the

care for, and the protection of, the village’s natural assets. For many villages in rural areas, the

main, and often only asset, is their relatively unpolluted environment, pristine nature, and the

traditional way of life. Securing local support in maintaining this environment was therefore seen as

critical to the long term sustainability of tourism as a alternative economic livelihood.

The development skills project was initiated as a long-term programme, part of which was to

develop a country-wide network of ECEAT CZ offices, offering advice to local entrepreneurs. One

element of the skills project was concerned with the certification of quality standards.

Product development focused on the production of a guidebook to country holidays (discussed

further below) and other promotional material.

4.3.2 Heritage Trails (HT)

Despite these small, but nevertheless positive beginnings, progress of the programme was

constrained because of inadequate policy and financial support. Problems of establishing a

consistent partnership with government continued in dealings with the Ministry of Regional

Development. Efforts to build an institutional relationship were hampered by frequently changing

political and civil service staff. As a result, in 1998 the ECEAT CZ board decided to extend its

TSRD programme further and develop new activities that would strengthen its position with regard

to the government.

The aim of this extension was not only to create a new tourist product that would build on the

existing skills and products programme but also to:

• Capitalize on the global trend towards ‘alternative’ holidays;

• Realize the full potential of the country’s natural and cultural assets –(the Czech Republic has

11 UNESCO World Heritage Sites, 6 UNESCO Biosphere Reserves, several national parks and

protected areas, and many smaller but unique sights of natural, cultural and technical heritage);

• Motivate those rural areas that had not yet developed their own tourism brand;

• Move beyond accommodation provisions to include additional products that would involve the

wider community;

• Expand co-operation to a wider range of accommodation providers;

• Attract higher income tourists to generate more income for rural communities;

• Strengthen ECEAT CZ‘s position as a partner for central government institutions.

By coincidence, a product that would meet these objectives was developed independently: the

ambitious, 18 month EU PHARE

11

project managed by the English not-for-profit company

Ecotourism Ltd. The project was implemented in three countries –(the Czech Republic, the

Republic of Slovakia and the Former Yugoslav Republic of Macedonia) and aimed to implement an

innovative product, the Heritage Trails.

The core principle of the PHARE project was that new Heritage Trails should be developed on the

basis of a cross-sector partnership. Thus ECEAT CZ again began to build high level relationships

with the Ministry of Regional Development and the Czech Tourist Authority (CTA) for project

implementation. Concurrently, the Ministry started to prepare the ‘National Development Plan’ as a

11

The EU PHARE programme was dedicated to Eastern, Central and South-Eastern European countries previously under

Communist regimes and in transition to market economies. Support for sustainable tourism development has been one of its tools for

regeneration of rural economies across these countries.PPT Working Paper 12 Tourism in Poor Rural Areas

16

key tool for the EU accession process. The Ministry’s willingness to listen and to understand the

needs of rural areas was visibly higher than a year before. However, no financial support was

received although institutional support slowly appeared. A Manual for Operators was produced as

part of the PHARE project and this was promoted as a CTA product in return for CTA's support for

the production of maps for the Heritage Trails, a website and electronic magazine (www.heritagetrails.cz). Thus ECEAT CZ gained the right to use the official CTA logo, and the Heritage Trails

became a part of the official Czech tourist offer.

Box 2: Heritage Trails

Linking several tourism facilities and products located within a geographic area and marketing them in unity

has been the essence of the 'heritage trails'. The aims are to design a marketable product; to increase the

number of visitors and revenue; to increase synergy effects between the variety of producers; to cut

marketing and administrative expenditure; and to ease access to the product. The individual enterprises

within the trail remain separately owned but co-ordinated action is required in terms of developing

infrastructure, signage, liasing with in-bound agents, pricing and marketing. The trail is not a fixed product in

terms of opportunities to visit it. It can be visited in part or as a whole, guided or self-guided, and by various

means of transport. However, it is also sold as a package to tourist via a tour operator.

Differing objectives of partners and participants emerged. For example:

• ECEAT wanted successful HTs in North and South Moravia that would provide a pilot scheme,

which could be ‘rolled out’ in other regions within the Czech Republic and internationally

through ECEAT's international network.

• During early implementation, environmental activists tried to 'highjack' the project for their

fight against a planned road and tunnel connection under the Jeseniky mountains to Poland.

• Entrepreneurs in both Moravian regions expected immediate results in the form of increased

visitor arrivals.

• Local and District Governments expected the establishment of an association that would be able

to solve the bottlenecks related to tourism development within their own districts.

Within the time-frame of the project two Heritage Trails were developed, one in Northern Moravia

and one in Southern Moravia. The process involved four key steps(described further in Box 3):

1. building partnerships;

2. identifying tourism products of the trail;

3. training stakeholders and developing strategies; and

4. marketing the trail.

Although the PHARE project ended in 2000, ECEAT has continued to roll out the concept and

share the training materials and approach. Thus there are now five HTs:

1. The Pradede HT in Northern Moravia: Sumperk, Bruntal, and Jesenik Districts

2. The Winelands HT in Southern Moravia: Znojmo, Uherske Hradiste, Brno Districts

And three new HTs based on replication and transfer of skills:

3. Trebic, Jihlava, Jindrichuv Hradec Districts

4. Decin, Litomerice, Usti, Ceska Lipa Districts

5. Sumava PPT Working Paper 12 Tourism in Poor Rural Areas

17

Box 3: Making a Heritage Trail

Step 1: Establish partnerships to create the Heritage Trail

• Core partners needed to be identified before funds could be received for enterprise development: e.g. a

UK based organisation, and one or two destination organisations as lead partners.

• Post receipt of funding, priority work in destination is to build on these partnerships and create further

partnerships through a stakeholder process that evolves from the activities outlined in the steps below.

Step 2: Identify the area and tourism products of the ‘trail’ with partner organisation(s)

• Clarify geographic area of the trail. This can include, rural, urban, or a mix of these environments,

usually dependent on the objectives of the enterprise development intervention.

• Clarify the products to be included, such as:

I. Heritage sites – natural and cultural (tombs, museums, castles, national parks, rivers, lakes)

II. Cultural interest – traditional and modern arts, crafts, music, dance, wine & beer making.

III. Accommodation, food and drink providers (hotels, guest-houses, B & B, self-catering, campsites,

restaurants, inns)

• Decide on how these products will be accessed and how they will be linked to create the trail – i.e. what

forms of transport can be used, but also what is ‘unique’ about the trail and what is has to offer.

Step 3: Train ‘trail’ stakeholders with partner organisation(s)

• Market analysis of tourism markets to identify which tourists to target

• Develop a marketing strategy that meets identified demand with tourism producer capacity.

• Train an in-bound tour operator and/or partner organisation(s) to manage arrivals, transfers, departures,

and travelling between each location on the trail – walking paths, cycle routes, car hire, public transport.

This includes ensuring HT sign-posts are in place on the trail and existing maps, and specially created

HT maps, are available for tourist information packages.

• Decide on price that tour operators should charge for the HT package including transport to destination.

Step 4: Market the Heritage Trail

• Prepare marketing materials – brochures, maps for self-guided tourists, web site, video, CD ROM, ezine.

• Distribute materials to identified markets – national tourist board offices, tour operators.

• Direct marketing through domestic and overseas tour operators contacted by HT management, either by

visits (Travel Fairs, arranged appointments), or by email and telephone.

4.3.3 Materials and standards for rural tourism products

As part of the initial project, ECEAT CZ produced a guidebook (‘A Countryside Holiday

Guidebook’) featuring all types of accommodation, including farms, campsites, self-catering, B&B

and small hotels. Table 3 below illustrates the widespread use of the book and the increase in visitor

numbers since 1993. To date, the majority of visitors have been Dutch, preferring simple campsites

and attracted by landscape characteristics, affordability, and the absence of mass-tourism. Although

these types of tourists generally spend limited amounts of money, the low investment required to

establish simple campsites is seen as a cost effective way to develop tourism experience. Other

tourists, such as the domestic, German and Belgian markets, seem to prefer self-catering

accommodation, B&Bs and small village hotels. These types of accommodation have increased in

number since 1999 in response to increased promotion in the tourist originating countries. PPT Working Paper 12 Tourism in Poor Rural Areas

18

Table 3: Number of guests identifying accommodation through ‘A Countryside Holiday

Guidebook’

1993 1994 1995 1996 1997 1998 1999 2000 2001

300 710 667 1903 1547 2355 2813 3487 3995

Source: ECEAT CZ

Marketing material specific to the Heritage Trails was produced, both in printed and electronic

form, including maps, an e-zine, and a website. In addition, the HT project built relationships with

tour operators in originating countries such as The Netherlands, Germany, UK, France and Belgium

and CTA marketed the product through their offices abroad.

Efforts to develop a certification scheme made considerable progress and two different schemes are

presently in operation in the Czech Republic. The first scheme relates to accommodation quality

standards and includes several different rating schemes depending on the different types of

accommodation provider. Most of these accomdation quality schemes are either run by tourism

trade bodies or governmental agencies. The second certification scheme refers to contributions to

ecological and heritage protection, and is run by ECEAT but implemented under bilateral contracts

by the Union of the Czech Rural Entrepreneurs, a sub-organisation of the Ministry for Regional

Development. The provider receives a certificate and right to show the logo which indicates their

contribution to the protection of the environment and/or heritage of the area.

ECEAT CZ is now working with several ‘kraj’ (counties) to develop an integrated set of tools for

sustainable tourism development replicating the methodologies used for partnership building, and

producing a ‘Countryside Holiday Guidebook’ for each county. Additional HTs have also been

created in Bohemia

4.4 Progress, challenges, impacts, and critical factors

The following section looks at the main areas in which progress has been made by the initiatives,

and any indicators of impact. It particularly considers progress in dealing with the key issues

(Section 2) for rural tourism product development:

• building capacity and quality

• marketing

• addressing practical constraints

• institutional support

While impacts on livelihoods of poor people need to be assessed, there is at this stage insufficient

data available. Key elements of the approach that have emerged as useful are identified, along with

the main challenges.

4.4.1 Progress and challenges

Product development

As indicated above, five HTs were created. Of the first two, the Northern Moravian HT has

flourished. Despite the difficulties, at the outset of creating the HT, and of finding a common PPT Working Paper 12 Tourism in Poor Rural Areas

19

denominator to unify local people’s efforts to build a cultural identity

12

, a follow on EU project

13

,

‘Pradede’ (Forefather’s Land), did achieve this unity of purpose. In addition the HT team had a

strong local project manager who was able to drive the project. This and the fact that a local

association had already been developed for the HT, helped to ensure local ownership of the new

product and to embed the process of collective decision-making, usually such an anathema in postcommunist countries.

The Southern Moravia HT was based on viticulture, and the trail was marketed as the ‘Moravian

Winelands Heritage Trails’. This trail has stagnated due to the absence of a core team to build

cohesion and purpose, but also because it did not have an additionall follow-up project.

Attracting tourists

As indicated in Table 3, the Guidebook is used by approximately 4,000 tourists per year who book

via ECEAT. In addition, it is estimated that two to three times as many book accommodation

directly with the farms. The Heritage Trails project itself attracted a total of 500 tourists in both

North and South Moravia between 2000 and 2002 (according to tour operator sales) of which by far

the largest number visit the Northern Moravian Trail (between 110 and 170 visitors per year). As

with the farms, it is difficult to estimate how many tourists visit the trails independently.

Building tourism capacity and skills

Approximately 15 one-day training sessions were held with about 225 potential, small-scale

entrepreneurs in seven districts. The goal was to encourage entrepreneurial newcomers to start-up

by sharing information with others hat have just done so. It is difficult to measure the direct impacts

of these training sessions since other factors may be involved in decisions to set up a new

enterprise. However, the activities led to the setting up of the Jeseniky independent HT Association

‘Pradedova rise’ (Praded´s land) which has been instrumental in the survival of the Northern

Moravia (Pradede) trail. The training also helped to create a network of new tourism entrepreneurs

which it is hoped will lead to longer-term capacity development through the sharing of experience.

Building institutional collaboration

Four one-day training sessions were held in order to bring together three stakeholders:

governmental and public bodies, entrepreneurs and NGOs. –These training sessions were used for

discussing tourist marketing, communication and co-operation. The results have been mixed.

Although establishing partnerships was one of the first steps in the HT implementation process, in

Southern Moravia this did not translate into setting-up a HT producers association as has happened

in Northern Moravia. Initial participation demonstrated a willingness to develop and exchange ideas

among the trail providers, and to implement those ideas (the Wine Trail), but joint action could not

be maintained. The HT project did however consolidate an effective partnership between ECEAT

CZ, the government (Czech Tourist Authority, and regional governments – ‘kraj’) and private

sector companies (inbound tour operators, foreign tour operators).

Generating local income

Revenue to local households that is directly attributable to these initiatives and easily measurable is

quite small so far. Holiday packages for the Heritage Trails are priced at around €300 per person

and this has generated a total of €150,000 to date. Of this, the local operator’s received around 30

12

This area had been resettled after World War 2, and there was no common cultural heritage.

13

Under Phare Credo, a cross-border programme that in this case is with Poland just north of the Praded mountain area. PPT Working Paper 12 Tourism in Poor Rural Areas

20

per cent, (around €45,000), €90,000 remained with local entrepreneurs, while 10 per cent (€15,000)

went to ECEAT CZ, for financing further development, funding and policy work.

Around 16 accommodation providers participate in the project resulting in an average income of

€5,625 over the two years between 2000-02. This is about the same as an individual could earn in a

year in the Czech Republic based on the average annual salary of CZK 13,000 (€433 per month, or

€5,196 annually).

However, this does not include earnings from other tourists who do not pass through ECEAT

bookings, and earnings from spin-off enterprise. Earnings to date are clearly just a start in what

promises to be an expanding product.

For tourists booking farm accommodation via the Country Holidays guide (i.e not on the Heritage

Trail package), the average length of stay is nine days. With an average expenditure per family of

three people of around CZK 500 (€16.7) per night this amounts to a total income of over €200,000

per year, much of which would ideally benefit the local communities.

Estimating ‘leakages’ is difficult, but they do occur largely because providing food and drink for

tourists in all types of accommodation is cheaper when bought from supermarkets, some of which

are now owned or licensed by foreign retail companies. Small independent and organic producers of

farm produce cannot compete against the low prices from large private sector farms. Besides,

certain food, drink and other supplies needed to accommodate tourists are often not available

locally.

Changing local attitudes towards tourism

A less obvious impact, but important over the long-term, is a change in attitudes towards

sustainable tourism and its delivery by a large number of those stakeholders who participated in

partnership workshops and marketing training. From limited understanding and a distrust of change,

participants in the ECEAT CZ training programmes achieved a substantive shift in their attitudes to

rural tourism development.

Both trail experiences to date suggest that positive social impacts occur only when strong

leadership, and repeated and new training opportunities are offered. These enable collective action

among trail providers to deliver consistently good standard products. When this happens, and

tourists do return on repeat visits as in the case of Jeseniky, the community is likely to support rural

tourism development, and new partnerships can be built, such as with Polish communities across

the border.

Enhancing environmental sustainability of tourism

At the local level, the understanding of the relationship between commercial sustainability,

protection and conservation of natural and cultural assets is taking time to develop. Evaluation

suggests five rather than two years of intensive investment in education and support are needed to

properly embed understanding of the importance of maintaining this balance. However, the ECEAT

CZ environmental certification scheme has been accepted at national level, and tour operators who

wish to use the HT name and logo have to pay 10 per cent of their HT revenue to ECEAT CZ.

Recently, agreement has been reached with the Ministry of Environment for ECEAT CZ to start a

programme for an eco-certification system throughout the Czech Republic to include urban areas

and go beyond the rural areas in which it works at present. PPT Working Paper 12 Tourism in Poor Rural Areas

21

Building policy support for rural tourism

Government support for tourism dispersion and diversification into the rural economy has partially

come as a result of ECEAT CZ’s persistence in presenting and demonstrating alternative forms of

tourism development over the past eight years. Final adoption of the HTs as a CTA marketed

product in 2000 was a substantial victory. Government policy towards dispersion is now more

proactive. In early October 2002, a high profile, national seminar on the countryside was opened by

President Havel and attended by government ministers (agriculture, economy, environment and

culture). Here, proposals were put forward for joint action on sustainable rural tourism, calling for a

joint forum of Ministries, the Tourist Board, ‘Kraj’ (county governments) to be established. The

objectives are to change restrictive laws and to support the promotion of rural tourism

entrepreneurs. The aim is to create an official country-wide unified tourism product with its own

logo. Following the autumn elections however the new Minister for Regional Development has

appointed a new director of CTA, who now decided to focus on Prague, Castles and Spas.

However at the county level it seems more successful. Some counties have now introduced a new

local subsidy programme for the improvement of rural tourism infrastructure (operational in N.

Moravia, while the Highlands county is planning this for 2003).

Some counties have also started to prepare local Countryside Holiday Guidebooks (for example N.

and S. Moravia, Highlands, S. Bohemia) and it is hoped that eventually all counties will follow suit.

The Heritage Trail concept still requires further promotion at the county level as its objectives and

potential are still not fully understood and supported. It is anticipated that the products will be

marketed by the counties themselves through exhibitions, regional road shows and travel fairs. In

this way, the HT and countryside products will become national products supporting a national

tourism strategy that does focus on dispersal and diversification of Czech tourism.

4.4.2 Key obstacles and ingredients of success

Key challenges to rural tourism development in the Czech Republic include:

• Lack of government support;

• Need for co-ordination and local leadership to make the concept of Heritage Trails work.

Because they involve a range of small-scale tourism products and providers, and the very

concept rests on linking these conceptually and logistically for the tourist, co-ordination is

essential. But where the local leadership to achieve this has been lacking, the HT concept has

not flourished;

• Lack of statistics and feedback (via government) for adaptive management and marketing.

• Lack of resources for updating marketing material;

• Slow pace, small scale of economic impacts to date;

• Uptake of the new product. HT is constrained by strong competition from other tourism

destinations in the Czech Republic (in particular Prague), and from other packages also sold by

tour operators. While commercial competitiveness is sufficient for some gradual success in at

least some of the sites and areas, the investment in rural tourism cannot create a sudden boom.

However, some particularly valuable elements of the Heritage Trail strategy emerge:

• On-going and repeated attempts to build institutional collaboration. Although progress has been

slow, institutional collaboration does occur.

• Defining the rural product through the creation of ‘heritage trails’. PPT Working Paper 12 Tourism in Poor Rural Areas

22

• Providing approach, tools, and marketing material that could easily be replicated and taken up

by others (particularly at kraj level). Thus the initial project work could serve effectively as a

demonstration for catalysing wider change. This is important to note given the donor shift away

from projects.

• Addressing marketing and customer information at the same time as developing the product and

resource.

• Working with counties (kraj) as they have gained an administrative role, and helping them

develop their interest in rural tourism promotion in very practical ways. PPT Working Paper 12 Tourism in Poor Rural Areas

23

5 Development of Rural Tourism through Heritage Trails in Uganda

5.1 Background: tourism trends, policy and rural tourism objectives

Historically, tourism was Uganda’s second most important export after coffee. In 1970, 102,000

foreign visitors were recorded for Murchison Falls National Park. This contrasts with 5,800

recorded in 1996 for the same Park (Mann 1998). The collapse in tourism volumes has been

mirrored by a collapse in the large mammal populations in protected areas, which were a key

tourism asset.

Since the restoration of political stability in 1986, tourism has re-emerged on the policy agenda, but

tourism development still faces many obstacles. An ambitious Tourism Master Plan drawn up a

decade ago (UNDP/WTO 1993) set targets for development and arrivals that have so far not

transpired. Inadequate government resources have been unable to provide the necessary framework

for tourism development and the protection of its valuable natural and cultural resource base. The

tourism sector has not been recognised as a priority development sector in wider government

circles. In 1996, tourism moved from having its own Ministry, the Ministry of Tourism, Wildlife

and Antiquities, to being part of the larger Ministry of Tourism, Trade and Industry (MTTI), and its

financial and human resource capacity was heavily reduced. Tourism has lacked political support in

the Ministry of Finance, Planning and Economic Development (MFPED) and therefore is not

eligible for central Poverty Action Funds (PAF) and not given priority in the Medium Term

Expenditure Framework. Despite the formulation of the new tourism policy, this situation is not

expected to change in the near future. Hence donor resources will be highly significant in the

implementation of the new tourism policy framework, but donor support to date has been

fragmented. The capacity of the sector is likely to be further weakened by an impending merger of

the Uganda Tourism Board (UTB), the Uganda Investment Authority (UIA) and the Uganda Export

Promotions Board (UEPB) that has been highly contested by the private sector and UTB. The

private sector has also been weak and fragmented.

Uganda’s tourism product is also problematic. The legacy of Idi Amin and more recent insecurity

on its borders has created an image problem (Holm-Petersen 2002). Uganda has to compete with

other African destinations (eg. Kenya, Tanzania, Zimbabwe, Botswana, Namibia and more recently

South Africa). Gorilla tourism has been the only niche where it had a competitive edge but this led

to a monoculture approach to tourism development and effectively put a ceiling on the industry as

only about 4,000 gorilla tracking permits are available annually. It is estimated that currently only

5,000 tourists visit Uganda each year and 10,000 expatriate residents participate in tourist activities

(Mann 1998).

On the positive side, Uganda has by-passed mass tourism, albeit unintentionally, because of its past

troubles, and is well positioned to take advantage of newer trends, and alternative forms of tourism

that can protect natural resources and stimulate cultural diversity while generating economic

growth. A new strategic plan and a tourism development policy have been developed to provide a

framework to transform tourism into a major economic sector and a vehicle for poverty alleviation

(MTTI 2002). The new tourism policy has been presented to Cabinet for approval, before being put

into legislation. The overall policy objective is for tourist arrivals to reach a ‘critical mass’, for the

sector to become a vehicle for development and to sustain Protected Areas (PAs). The policy

emphasises ‘large-scale participation of communities’ and cultural tourism, including handicraft

development, as a rural income generating activity. It also embraces a bottom-up principle of

supporting developments at district level, again with a focus on community-based tourism

development. Various donor programmes are supporting product and infrastructure development PPT Working Paper 12 Tourism in Poor Rural Areas

24

that will encourage niche product diversification and promotion of avi-tourism (bird watching),

mountaineering, sport fishing, white water rafting, primate viewing, eco-tourism, cultural and

community-based tourism (Mann 2001).

Diversification and dispersal of tourism into rural areas have been strongly supported by the

Government, particularly the UTB, for two main reasons. Firstly, UTB launched a diversification

programme in the mid-1990s and community and cultural tourism were identified as important

niche products to redevelop international tourism. Thus rural tourism is seen as a means to improve

and expand the product. Secondly, it was recognised that community tourism could contribute to

wider national development objectives enshrined in Uganda’s Comprehensive Development

Framework (CDF) and the Poverty Eradication Action Plan (PEAP) (which has guided government

policy formulation since 1997).

In marketing Uganda, UTB emphasises a circuit of nature-based attractions predominantly in the

west and south-west: Murchison Falls National Park, Kibale Forest National Park, Queen Elizabeth

National Park, Bwindi Impenetrable Forest National Park and Lake Mburo National Park. Other

important tourist sites outside this circuit include white water rafting,the Source of the Nile and the

Ssese Islands in Lake Victoria. Tourism development in the North has been constrained by

insecurity. This approach is the antithesis of the traditional approach to tourism in developing

countries, where ‘honey pot’ development entails the building of large and exclusive resort hotels

by foreign investors, ring-fenced to keep the surrounding poverty at bay.

5.2 The Heritage Trails Initiative

The concept

Building on the marketing efforts of UTB, an initiative to develop and market a new rural tourism

product, a Heritage Trail (HT), was conceived in the late nineties. A Heritage Trails Project 1999-

2002 was established as a partnership between three organisations: the Kabaka Foundation, Action

for Conservation through Tourism (ACT), and the Uganda Community Tourism Association

(UCOTA). The Kabaka Foundation is an indigenous Ugandan NGO, established by the King

(Kabaka) of Buganda – a traditional kingdom within Uganda restored by the current President

Yoweri Museveni. ACT is a British charity and UCOTA is a tourism producers’ association,

formed in the mid-1990s ‘to encourage quality community-based tourism with the aim of benefiting

communities through sustainable development’ (Williams, White and Spenceley 2001).

As in the Czech case, a Heritage Trail was seen as a way of defining and creating a rural tourism

product. The project’s aim was to establish a pilot heritage trail linking a number of cultural sites in

the Buganda Kingdom to be marketed as one product. The link between the sites was the common

promotional theme, the ‘Kabaka’s (King’s) Trail’, rather than a physical route. The project aimed to

facilitate the creation of local community tourism associations at each site, which would develop

and manage tourism services and facilities.

The design of the project rested on some core considerations and principles:

1. It explicitly evolved from community-based tourism, with a focus on the social and

economic benefits of a trail-based tourism product for local communities.

2. It focused on the importance and potential of cultural revitalisation. In the Kingdom of

Buganda, as elsewhere in Uganda, much of Uganda’s rich cultural heritage fell into disrepair

during the civil strife under Presidents Amin and Obote. The Kabaka Foundation and ACT PPT Working Paper 12 Tourism in Poor Rural Areas

25

identified tourism as a tool to revitalise cultural sites and to reduce poverty amongst

marginalised communities who are the traditional custodians of the heritage.

3. In connection with the first two points, the project focused on creating community

institutions, not just supporting individual entrepreneurs. Community associations were seen

as the guardians of culture, the developers of the tourism resource, and the agents for

community benefit. This is more in line with a development approach in rural areas than a

typical small business approach.

The design of the project was also influenced by security considerations. In 1999, a group of

tourists on a gorilla-watching holiday in the Bwindi Impenetrable Forest National Park in the far

south west of the country were killed by rebels from Rwanda. As a result it was decided to locate

the development of a pilot heritage trail near to Kampala, and also to focus initially on the domestic

tourist market (ex-pat residents, Ugandans and school children), since international arrivals had

fallen sharply following the incident. Other strong reasons to develop the trail in this central area

were that it fell within the traditional kingdom of Buganda and the project had the strong support of

the Kabaka (King). Although these sites are within 45 minutes of the capital city, a baseline study,

conducted for the project in 2000, showed that they remain on the periphery of mainstream

economic activity, lack access to essential services and infrastructure and exhibit high levels of

poverty.

The objectives of the heritage trail project were therefore defined as follows (HTU 2002):

• to demonstrate how tourism can be harnessed for poverty alleviation;

• to conserve natural and cultural assets through education and understanding of sustainable

tourism development;

• to assist communities to participate in the tourism opportunity and to influence policy making in

this area; and

• to strengthen local institutions, particularly UCOTA.

Approach and strategies

The sites to be included in the Buganda Heritage Trail were identified by stakeholders such as

Kingdom officials and the Commissioner of Antiquities. Extensive field visits were undertaken and

in November 1999 nine sites with the highest tourism potential were selected on the basis of:

• proximity to the capital

• accessibility

• attraction

• type of site

• historical significance

• marketable product theme

• community compatibility

However, project implementation only proceeded with six of the nine sites. The reasons why

implementation couldn’t proceed at three sites were varied. They included a lack of community

cohesion and/or motivation, the community was difficult to define, insurmountable political

sensitivities, other agencies were providing assistance and/or it was questionable whether incomes

generated would benefit the intended beneficiaries. Details of the six remaining sites are included in

Table 4. PPT Working Paper 12 Tourism in Poor Rural Areas

26

Table 4: Community associations and attractions on the Kabaka‘s Trail

Community Association / Site Attraction No. of

members

Baagalayaze Heritage Site Burial tombs of a mother of a king 35

Kanyange Cultural Centre Burial tombs of a mother of a king 22

Naggalabi Cultural Tourism Association

(NACUTA)

Coronation site 25

Ssezibwa Falls Tourism Project (SFTP) Traditional spiritual site for healing

and area of natural beauty

29

Suuna II Wamala Tombs Tourism

Association (SWATTA)

Burial tombs for a king 60

Tourism and Handicraft Association of

Kalema (THAKA)

Prison ditch 40

Source: HTU, 2002

The main activities of the project have involved:

• On-site work with communities

• Community training programme

• Building institutional collaboration and strengthening

• Marketing

Table 5 shows the chronology of activities for developing the trail sites.

Table 5: Heritage Trails Uganda Project Activities

Year Main Activities

1 • Trail site identification, market research and site selection;

• Dialogue with local site stakeholders to confirm interest in participation and exploration of

land user rights and/or revenue sharing agreements;

• Creation of site community tourism associations where appropriate;

• On-site handicraft workshops to facilitate income-generation in the short-term and mobilise

community members;

• Baseline socio-economic survey of communities and historical site research;

• Tourism and conservation awareness building.

2 • Participatory business development planning;

• Implementation of the community training programme;

• Implementation of site plans.

3 • Production of promotional and educational materials;

• Further community training;

• Further site development;

• Launch of the pilot trail and implementation of the marketing strategy;

• Review and forward planning;

• Development of other trails country-wide.

On-site community work

This initially focused on building the capacity of new legally-registered community-based tourism

institutions. Community members were mobilised through local leaders such as elected councillors

and cultural guardians and attended participatory seminars to develop a constitution and elect an

Executive. To participate in the activities of the association, community members pay a

membership fee. Of the 215 total members, 135 or 63 per cent are women. PPT Working Paper 12 Tourism in Poor Rural Areas

27

Other on-site activities included a training programme, restoration of cultural assets (involving

training in traditional building skills), exchange visits within Uganda and to Tanzania, and business

planning. A number of potential income-generating activities were identified through a participatory

planning process and assessed through business planning training. However, assessing the

commercial sustainability of these micro-enterprises proved a particularly challenging part of the

project due to low levels of education. Despite follow-up training, some of the community

associations find the business plans difficult to use effectively.

Clarifying the land rights of the new associations was a critical factor in the project. The Kabaka

Foundation acted as a facilitator in negotiations with the Kingdom of Buganda. The three tourism

associations operating on King’s land

14

were given guaranteed use rights. A legal agreement was

made stipulating that the three associations were required to give 30 per cent of the net entrance fee

collected at each site to the Buganda Kingdom administration for maintenance of other sites. The

remaining 70 per cent and all other income from their activities (e.g. guiding, handicraft sales,

cultural entertainment) accrues to the association and its members. This agreement provided new

incentives for the local community to work together with each other and the traditional cultural

institution.

Institutional collaboration

In addition to institutional capacity building for each community tourism association, the project

developed links with other institutions nationally, and an institutional strengthening programme for

project partners and staff was undertaken. Two project advisory groups were established. A tenmember steering committee included representatives from private, public and voluntary sectors

including the UTB, Uganda Tourism Association (UTA), Association of Ugandan Tour Operators

(AUTO), Voluntary Service Overseas (VSO), the Department of Antiquities and Museums

(DAMS), the Ministry of Gender, Labour and Social Development (MGLSD) and the Ministry of

Tourism, Trade and Industries (MTTI). It increased the policy influence of the project and also

played critical role in mediating political sensitivities between stakeholders and mobilising

resources (Opio 2002). A larger stakeholder group (approximately 40 members) was established to

guide site selection country-wide for future trails in the extension phase of the project. This group

included a wider range of stakeholders, such as cultural institutions, UNESCO, the Uganda Wildlife

Authority (UWA), and the National Curriculum Development Centre (NCDC). Institutional links

were also established with a number of training and research organisations. Figure 1 illustrates the

relationships between the different groups and organisations in the pilot trail project. The larger

stakeholder group reached a consensus that the project initially run by the three NGOs should be

transformed into an independent NGO, ‘Heritage Trails Uganda’ (HTU), to reflect its national

remit. HTU was registered in December 2002.

Beyond these formal links, project staff participated in policy discussions on tourism and culture,

and advocated more cultural education on the national curricula. The focus of engagement has been

to encourage the recognition of cultural tourism as a tool for poverty reduction and heritage

conservation. Such ideas have also been disseminatined internationally, through media coverage,

distribution of a video, and presentations at several international conferences.

14

Of the three other sites, two are tombs of queen mothers. These are owned by the traditional cultural guardian of the tomb, the

Nnamasoles, who are the patrons of the respective community associations and encourage community participation in tourism and

conservation activities. The third site, Ssezibwa Falls, is on land owned by the Church and by a tea company. The association secured

a lease from the church and the tea company donated its land. PPT Working Paper 12 Tourism in Poor Rural Areas

28

Figure 1 Institutional Relationships in Uganda’s Heritage Trail Project

Marketing

At the start of the project as part of the baseline study, a tourism survey was conducted at each site

to compile information on visitor numbers, types and needs. It showed that most sites received few

visitors and that these were mainly Ugandans with spiritual offerings and schoolchildren (ACT

2000). In early 2001, qualitative market research was carried out with the help of focus groups

including tour operators, Kampala based ex-pats and Ugandans, and school children. The groups

first concentrated on the HT concept, and then undertook an analysis of each site within the

Kabaka’s Trail, and included both domestic and international potential markets for the trail. In

November 2001, ‘Kabaka’s Trail’ was launched with promotional material and high profile

marketing. Current marketing initiatives include linking up with private sector operators who have

expressed support for the trail through UTA and AUTO. For example, the Sheraton Hotel sponsored

a marketing briefing on the trail for tour operators in March 2002.

The project recently (August 2002) entered an extension phase which is intended to expand the

heritage trail concept country-wide through the new NGO, Heritage Trails Uganda. The national

stakeholder group developed a more detailed set of criteria for site selection based on lessons learnt

in the pilot phase. There are currently insufficient funds to undertake professional market research

to guide new site selection in the extension phase, hence site selection is likely to be oriented on a

survey of AUTO members, and consultation with the NCDC for cultural education potential.

5.3 Progress, challenges, impacts and key factors

5.3.1 Progress and challenges

Assessing impacts

Methodologies for assessing the positive and negative impacts of tourism enterprise intervention on

communities in developing countries in terms of poverty reduction are a recent development, and

Partner:

Kabaka

Foundation

Partner:

ACT (Project

Management)

Partner:

UCOTA

Advisory Groups: public,

private and voluntary

sectors

1. Steering Committee

2. Stakeholder Group

Other

organisational

linkages

Heritage

Trails Project

Team

Project Beneficiaries:

6 Community Tourism Action Groups on the Kabaka’s TrailPPT Working Paper 12 Tourism in Poor Rural Areas

29

still in the process of being tested (Ashley 1999, Holland 2002). Due to a lack of documented case

studies, the Heritage Trails Project in Uganda has developed its own set of indicators for monitoring

project progress. These cover both positive and negative impacts, with a focus on the impacts on

livelihoods at local level. They cover the following impact areas:

• Empowerment, networking and dissemination (e.g. number of community association members,

number of members elected to the UCOTA Executive, number of new partnerships formed,

number of media exposures);

• Skills training (e.g. number of community association members trained in business

development, guiding etc);

• Enterprise development (e.g. number of tourism services provided, number employed, number

of visitors);

• Access to essential resources (e.g. number of community development projects benefiting from

tourism enterprise development);

• Conservation of natural and cultural assets and values (e.g. number of renovated cultural

structures, number of cultural guardians resuming and/or withdrawing from traditional roles).

Data collected on these to date is used below to consider progress against the key issues for rural

tourism identified above, and also considered in the Czech case study. At the time of writing the

community tourism associations have only been operational for one year and the marketing strategy

has not been fully implemented, thus it is again early to assess impacts, particularly on livelihoods.

Product development

The foundations for a new tourism product in Uganda have been developed. The project has

focused on creating associations, restoring sites as products, and developing skills. While the

tourism products now exist they are not yet thriving. However, each association has developed at

least three micro-enterprises including guiding around the cultural site, handicrafts and cultural

entertainment.

Sourcing of raw materials such as spear grass and reeds for the traditional cultural structures pose a

challenge. A recent needs assessment

15

carried out in June 2002 highlighted that a main operational

difficulty for most of the trail groups was a lack of raw materials. These raw materials used to be

freely available locally or donated by loyal subjects, but due to agriculture practices (particularly

livestock grazing) and increased settlement, the materials have to be transported, incurring transport

costs.

Local capacity and product quality

The project has focused on institution building of associations as much as developing

entrepreneurship, and it is still very early to make judgments with regard to acquisition of business

skills. The quality of micro-enterprises inevitably varies across the associations depending on their

capacity, as does their potential to diversify service provision. For example, the traditional

performance group of Baagalayaze Heritage Site is of a very high standard and perform at local

functions as well as on-site.

Maintaining service quality can be especially challenging as several sites lack reliable telephone

communications for advance notice of bookings. In the basic needs assessment, five out of six trail

groups identified the lack of telephones as a main operational challenge. Though UCOTA plays a

15

UCOTA Membership Information questionnaire survey, June 2002 PPT Working Paper 12 Tourism in Poor Rural Areas

30

role in facilitating bookings and providing other support to community associations, it is still also in

need of external technical support.

A key challenge identified by the community tourism associations is a lack of financial resources to

develop and maintain product quality and reliability. An initial low level of visitors is a barrier to

gaining such finance. Marketing remains a challenge to the community associations, in particular

the marketing of handicrafts from which they can generate income even when visitor numbers are

low.

Local benefits: financial and other

The community tourism associations have earned some money from paying visitors to the sites,

although visitor numbers are still too low to make a significant impact. However, visitor numbers to

one of the better known sites, Ssezibwa Falls, have doubled and the association employs two paid

guides (the other sites have volunteer guides). The site earned 875,300/= Uganda Shillings,

(approximately GBP £340) between January and November 2002 from entrance fees.

In addition to visitor fees, sales of handicrafts to the UCOTA shop generated 425,000 Uganda

Shillings (GBP £170) worth of business for five of the associations between January and August

2001 (the shop was temporarily closed after August 2001). Total income is thought to exceed this as

crafts have also been sold on-site, for example, book keeping records at Baagalayaze show that 90

per cent of craft sales were made on-site in 2001. It is anticipated that craft sales through UCOTA

will also increase through technical assistance from Traidcraft and the McKnight Foundation.

In addition to income, two forms of non-financial benefits are considered particularly important

impacts of the projects. The first is the revival of cultural values and associated social networks and

activities

16

Before the project commenced, most of the trail sites were in a serious state of disrepair .

and in some cases were overseen by elderly cultural guardians with scarce resources. The wider

community, especially the younger generation, had no attachment to the sites because of the

abolition of the Kingdom during the political unrest. The project has initiated the regeneration of

both physical structures (such as traditional receptions, ceremonial houses and tombs) and

traditional, culturally specific, skills such as building, bark cloth making, music and dance. This has

encouraged several cultural guardians to resume their traditional roles and for cultural functions at

the sites to recommence.

Secondly, the involvement of community members in participatory and business planning is

important for developing local capacity, even if this is not immediately reflected in enterprise

development and revenue.

Marketing

To date visitor numbers have been low, partly because the marketing strategy has not yet been fully

implemented (especially for the domestic market). It is anticipated that visitor numbers will grow,

however, as several international schools in Kampala have expressed interest and local ground

handlers are currently incorporating trail sites into their itineraries.

The proximity of the trail sites to Kampala should facilitate uptake by the domestic market, while

the fact that three of the sites are also located on the main tourist routes increases their accessibility

for international visitors. However, a constraint for two sites (Katereke and Wamala Tombs) is the

poor state of the access dirt road, particularly in the rainy season.

16

See ‘Key non-financial livelihood impacts by case study’ in Ashley, Roe and Goodwin, 2001, Table 7, p.24 PPT Working Paper 12 Tourism in Poor Rural Areas

31

Perceptions of insecurity have also constrained growth of the international tourism sector. Security

in protected areas in the west and south-west has improved but the situation has deteriorated further

north due to a rebel insurgency.

Marketing material for the pilot trail in Uganda to date consists of brochures, flyers for international

trade fairs, mini ‘infopoint’ cards, a web site (www.culturalheritagetrails.com). Familiarisation trips

for local ground handlers and schools have been particularly successful. The project is currently

reviewing its marketing strategy with more emphasis on cost-effective methods to attract the

domestic market (e.g. radio and TV adverts, distribution of marketing materials through ex-pat

networks). In the longer term UCOTA will be responsible for marketing the trail sites as part of its

cultural product line. The pilot trail has the support of the Uganda Tourist Board and is featured on

its web-site (www.visituganda.com).

Creating institutional capacity and supportive policy

The project focused on institutional strengthening of UCOTA, in terms of capacity building for

organisational management, marketing, fund-raising and practical skills such as in computing and

driving. An internal evaluation report concluded that overall the capacity building programme was a

success (Dixey 2002). In particular, residential courses enabled the newly elected UCOTA

Executive who reside in different parts of Uganda to constructively address a management

transition. This capacity-building process was, however, just the beginning of a much longer

institutional strengthening programme that is being continued throughout 2002 with additional

resources.

In 1999 there was no Government tourism or culture policy although the wider policy framework

and therefore UTB and MTTI were supportive of poverty alleviation through rural tourism

development. A key achievement of the project was that it was very influential in shaping the new

draft national tourism and culture policies (Opio 2002).

5.3.2 Obstacles and success factors

Among the challenges encountered, the main obstacles in the Ugandan context emerge as:

• Low level of development and lack of skills at community level. The formation of the

community associations, their business planning, product development and marketing

training took much longer than anticipated to reach a reasonable standard for foreign and

domestic tourism markets. The practical concomitants of low development, such as lack of

telephones and access to credit, also pose a challenge for building product quality.

• Limited international tourism in Uganda. While international visitors could provide a strong

and culturally interested niche market, continued insecurity is constraining the growth of

international arrivals. The domestic market for the trails is important but limited. Marketing

to either group is slow and needs greater investment of resources. The knock-on effects on

small-scale producers can be substantial: one year without tourists may mean the collapse of

a small tourism enterprise without an adequate financial safety net to get through the tough

times.

• Implementation obstacles: the initial project time period of two years was too short and the

design over-ambitious. Resources and expertise in some areas have been insufficient, while

funding delays exacerbated problems. The project did achieve most of its objectives over

three years (Opio 2002) although the time period was simply insufficient to fully implement

a bottom-up participatory approach to product identification and marketing and to help the PPT Working Paper 12 Tourism in Poor Rural Areas

32

communities achieve their enterprise and management objectives. However, with this type

of intervention, which is always likely to depend on donor support, short-term funding

cycles are likely to remain a problem unless donors change their way of operating, or

investors are found from elsewhere.

It is clearly early days for the project, particularly as far as delivering flourishing enterprises and

livelihood impacts on the ground are concerned. Nevertheless, some important strategies for laying

the foundations for rural tourism can be identified, including:

• Building community associations, not just entrepreneurs, in order to serve the social

development objectives of the approach;

• Working with women and specifically with craft producers, to get activities going;

• Investing in training at community level, including exchange visits;

• Building on traditional cultural assets and tapping into the cultural niche in the market;

• Developing innovative land user rights agreements;

• Building partnerships with a range of national institutions, and building capacity in UCOTA.

These partnerships become particularly important now that the concept is being extended to

other sites;

• Developing a range of marketing strategies and readiness to focus on the domestic sector and on

schools. Building links with tour operators;

• Focusing the pilot on sites near Kampala to minimise logistical and security problems, and

maximise the benefit of support from the Kabaka (King). PPT Working Paper 12 Tourism in Poor Rural Areas

33

6 Implications for Developing Rural Tourism

The two case studies share some similarities, despite the very different contexts. Both sought to

develop a rural tourism product by marketing a package of attractions as a ‘trail’. Both invested

much of their effort to work at the local level, and sought to build an association to co-ordinate the

diverse community members or service providers. In both cases, there are associations that have

thrived and others that have ground to a halt. Both also focused on building relationships with

policy-makers and a network of other institutions, and have gone on to use this to replicate the trail

concept. In both cases, marketing was undertaken by the project rather than by the local service

providers.

There are also considerable differences. The Ugandan initiative benefited from a high level of

government support from the start compared to relative disinterest in the Czech Republic. However,

it also had to grapple with a much higher degree of underdevelopment, in terms of local skills and

infrastructure.

This section briefly reviews what light can be shed on the key issues for rural tourism, based on the

analysis of the strategies, progress and obstacles of the two case studies. In doing this, it returns to

the themes and key issues outlined in Section 2, and also draws on other rural tourism examples to

amplify points. In order to identify broader lessons, the analysis necessarily moves up from

describing details to a level of generalisations, none of which will be applicable in all rural tourism

situations. Thus this section should be interpreted as highlighting implications of wider relevance

that can be drawn from these case studies, but not providing a blueprint for rural tourism

development.

6.1 Key Issues

Creating a rural product

These Heritage Trails were not created in rural sites of exceptional tourism value but in attractive

rural settings with some undeveloped assets (such as for example culture, horticulture). The heritage

trails demonstrate the value of packaging an array of attractions as a ‘trail’. The trail concept is

fundamentally a marketing tool, providing a brand image in the mind of the consumer. But it can

also be an organising and mobilising tool to bring together producers on the ground. This is likely to

be particularly important in rural areas, where most products and producers are small-scale, and

need to work together to gain economies of scale (e.g. in marketing, accessing training). The value

of promoting a rural product as a trail is also evident in a South African case described by Rogerson

(2002). The implication is that for the more typical rural areas (not the exceptional sites), use of a

trail concept or other means of packaging and branding can be useful ways to strengthen local

tourism product.

Ensuring sufficient quality of the product and services

This has proved to be a big problem in Uganda, given the limited time frame to date, low levels of

education, lack of any previous tourism experience in the rural areas, and lack of local investment

funds. A similar example comes from the Amadiba Horse and Hiking Trail on South Africa’s Wild

Coast, which is a community project based on a strong asset (beautiful undeveloped coastline)

providing horseback trails and hiking. However, the NGO involved has also been struggling to raise PPT Working Paper 12 Tourism in Poor Rural Areas

34

standards of guiding and accommodation to sufficient levels (Ntshona 2002). Quality appears to

have been less of a problem in the Czech Republic where, although the enterprise culture was new,

general skill levels were higher. In particular, the trails in the Czech Republic could make use of the

existing certification programmes, which helped to set, and encourage, quality standards. The

implication is that ensuring sufficient quality of rural tourism services can be a big challenge,

particularly in poor developing countries, and requires substantial investment in training.

Investing in marketing and attracting visitors

It was suggested earlier, drawing on an example from Poland, that one problem in rural tourism is

that a diversity of small producers struggle to invest sufficiently in marketing. This appears to have

been borne out by these two case studies as in neither case are the local service providers

themselves yet doing the marketing. ECEAT CZ and the Ugandan Heritage Trails Project have

produced marketing material and made links with private operators, as well as the National Tourism

Organisation. The same applies to the Amadiba trail in South Africa, where marketing is done by a

NGO. Even with NGO resources invested in marketing, the number of visitors attracted so far has

been low. In the Ugandan case, market research was highlighted as very valuable, though not

extensive enough. The implication is that marketing emerges as a major challenge for rural tourism

entrepreneurs. In such situations, it is important to link them to an outside institution that can invest

in marketing for the initial period, whether this is a project, NGO, or Government Tourism

Organisation. Market research from early stages onwards is a necessary requirement and invaluable.

Dealing with practical, logistical and implementation challenges

Both projects encountered a conflict between an ambitious design and limited time scale and

resources. Training was delayed or too short and skills development not always sufficient. Project

funding was too short. The implication here is that building rural tourism is a long-term and slow

process, and needs to be planned and resourced as such.

Building local institutions at community level

The Czech project worked directly with new entrepreneurs, while also seeking to encourage local

associations that would co-ordinate the entrepreneurs. These emerged as key elements: where the

association thrived under strong leadership (as in Northern Moravia), the trail has been successful

and continues to operate. Where leadership was lacking and the association weak (as in Southern

Moravia), the trail has not flourished. The Ugandan project focused even more exclusively on

building community institutions rather than entrepreneurs, given the different development context

and the explicit socio-economic and cultural goals of the project. The associations, however, are

micro-organisations, located at each individual site, rather than spanning across, and ‘uniting’ the

‘trail’. The focus on associations may have resulted in relatively little development of

entrepreneurship, or at least slow development of entrepreneurship. However, this has also built the

capacity for collective management of the tourism assets and tourism development. The implication

is that the need for local associations, to unite entrepreneurs or manage collective assets needs to

be assessed and may require substantial investment. This is in addition to direct training and

support of individual entrepreneurs. Whatever the external input, however, some may well grind to

a halt for internal reasons.

Building institutional networks and policy support

Whereas the general picture is that support for rural tourism is better established in Eastern Europe

than sub-Saharan Africa, the situation in the two cases reviewed here was the reverse: the Czech

project struggled to win recognition from the Tourism Board, and even then was constrained by PPT Working Paper 12 Tourism in Poor Rural Areas

35

lack of tangible support, while the Uganda project had strong policy backing from the start. This

made a particular difference to the degree in which a common marketing strategy was developed

and supported. On the other hand however, in terms of visitor arrivals the Heritage Trails in the

Czech Republic have proven to be considerably more successful than the Ugandan trails. In

addition to working directly with tourism policy makers, both projects sought to develop

collaboration with a wider array of institutions: local councils in the Czech Republic, NGO’s in

Uganda. Several considerations suggest that this institutional collaboration was very important:

• In both cases, the initial Heritage Trails are only pilot sites, to act as the basis for wider

replication. Replication depends on uptake of the concept and methods by others rather than

perpetual expansion of a project.

• In both cases, a time-bound fixed-resourced project appeared to be too limited for the rural

development process, making it all the more important that an on-going process to support rural

tourism is built in other institutions.

• While both these cases have marked success in building institutional collaboration, examples

from elsewhere indicate how the lack of institutional co-ordination can block rural tourism. For

example, in South Africa’s Wild Coast, an area of considerable tourism potential, the Amadiba

trail and a new casino are among the very few tourism developments of recent decades.

Ambitious tourism development plans by many different governmental bodies have floundered,

and institutional weaknesses and rivalry have played a key part (Ashley and Ntshona 2002).

Another case study on the northern edge of the Selous National Park in Tanzania highlights

another extreme, where the objective of promoting rural tourism falls between different

institutional mandates. It is neither a priority for national tourism planners, nor the rural

Council, nor the conservationists running the community-based natural resource management

programme or the reserve to take control over promoting rural tourism. This partly explains why

there is no diversification into tourism enterprise in a location adjacent to a key tourism asset

(Ashley, Mdoe and Reynolds, 2002).

Dependency of rural tourism on national tourism developments

In many cases, rural tourism is developed or expanded as a strategy for attracting tourists away

from existing resorts (whether urban or rural) and dispersing them into new areas. In other cases it

may be developed to offer an entirely new package to a new market (e.g. to Dutch campers, not

Prague weekend-trippers, in the case of Czech Heritage Trails). But new tourism products are

dependent, to varying degrees, on the overall growth of tourism, and particularly the image of the

country as a whole, not just the rural area. This is evident in Uganda where perceptions of insecurity

in the country have hampered development of the international market for the heritage trail sites.

Thus the implication is that successful development of rural tourism may be partly dependent on

success of the national tourism product, or at least hampered by constraints or downswings that

affect tourism. The linkage between the new rural product and existing products, whether it is an

add-on for the same market or a new offering for a new market, needs to be identified as part of the

development strategy.

6.2 Can rural tourism contribute to poverty reduction?

Both case studies describe small, recently implemented projects and as such cannot demonstrate

clear successes in creating rural tourism and reducing rural poverty. For some indication, we have

to turn to comparable experience in countries with a longer investment. In Eastern Europe, one of

the most successful examples in developing rural tourism is Hungary. A combination of a

successful national tourism industry, a serious policy commitment to rural tourism, an attractive PPT Working Paper 12 Tourism in Poor Rural Areas

36

rural setting, and many years experience of attracting Western tourists (in particular during the

‘closed-off’ communist days) have generated a well-established and important tourism sector. This

does not mean that all the other East European countries can automatically do the same, particularly

as they entered the post iron-curtain era without an existing western-oriented tourism industry, but it

does suggest that the product potential is there. In sub-Saharan Africa, one comparative example to

turn to is Namibia, where the work of the Namibian Community Tourism Association (NACOBTA)

initially served as a model for the establishment of Uganda’s UCOTA. NACOBTA focuses

exclusively on community tourism, much of which is in the north-east and north-west communal

(rural) areas. While community tourism there is still developing (rapidly in some areas) from a tiny

base, and has its own share of problems, a review of NACOBTA in 2001 concluded that ‘most

CBTEs are making an income that has changed their communities from being poor or very poor to

being better off. This has contributed significantly towards the equitable distribution of resources

between urban and rural communities’ (Nicanor 2001, p34).

Clearly there are cases where tourism is successfully developing and contributes to growth in rural

areas. The extent to which the growth and opportunities generated are pro-poor is a different issue.

As discussed in Section 2, the relative importance of small-scale enterprises and cultural attractions

is likely to enhance opportunities for the poor, but Rogerson’s (2002) analysis of the Highlands

Meander in South Africa issues an important warning note: while the creation of the ‘Meander’ has

been successful in creating and marketing a product, the all-white ownership of, and participation

in, the tourism sector in the area has not been reversed. Thus from a pro-poor perspective, success

needs to be measured in terms of both creating tourism-led growth in rural areas, and in terms of the

distribution of opportunities among the poor and others. PPT Working Paper 12 Tourism in Poor Rural Areas

37

References

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April 1999 – April 2000 (Phase 1a)’, Unpublished Project report, Action for Conservation

through Tourism, Bristol.

Ashley, C., Mdoe, N. and Reynolds L. (2002) 'Rethinking Wildlife for Livelihoods and

Diversification in Rural Tanzania: A Case Study from Northern Selous', LADDER Working

Paper No.15

Ashley C. and Maxwell S. (2001) ‘Rethinking Rural Development’, Development Policy Review, 19

(4):395-425 London: Blackwell Publishing

Ashley, C., Roe, D. and Goodwin, H (2001) Pro-Poor Tourism Strategies: Making Tourism Work

for the Poor, London: Overseas Development Institute, International Institute for Environment

and Development, and Centre for Responsible Tourism, University of Greenwich

Binswanger, H. P. and Deininger, K. (1997) ‘Explaining Agricultural and Agrarian Policies in

Developing Countries’, Journal of Economic Literature 35:1958-2005.

Braman, S and Fundación Acción Amazonia (2001) ‘Practical Strategies for Pro-Poor Tourism.

Tropic Ecological Adventures – Ecuador’. PPT Working Paper No. 7, London: ODI, IIED,

CRT.

Czech Tourist Authority (2000) Annual Report 2000, at http://czech.kiwano.net/pdf/to02.pdf

Dixey, L. (2002) ‘Evaluation of the Institutional Strengthening Programme of the Heritage Trails

Project for Heritage Trails Project Staff and Partners: the Uganda Community Tourism

Association and the Kabaka Foundation’, January to August 2001, Unpublished internal project

document, Heritage Trails, Kampala.

ETB (1991) ‘The Green light: a Guide to Sustainable Tourism’, London: English Tourist Board

Gannon, A. (1994) ‘Rural Tourism as a Factor in Rural Community Economic Development for

Economies in Transition’ Journal of Sustainable Tourism 2(1+2), pp 51-60

Hoggart, K., Buller, H. and Black, R. (1995) Rural Europe: Identity and change, London: Arnold

Holland, J. (2002) ‘Methodologies for Impact Assessment of Enterprise Development Interventions

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Holm-Petersen, E. (2002) ‘A New Approach to Tourism in Uganda’, Unpublished paper presented

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Kieselbach, S and Long, P. (1990) ‘Tourism and the rural revitalization movement.’ Parks and

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Mann, S. (1998) ‘Plans to rebuild tourism, Country Report: Uganda – on the ascent’, ACP-EU

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Mann, S. (2001) ‘Uganda’s Opportunity’, Our Planet, pp.24-25, Vol. 10(1).

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Central and Eastern Europe: Educating for Quality, Richards, G. (Ed), Tilburg: Tilburg

University Press, pp175-182

Ministry of Regional Development (1996), Tourism in the Czech Republic, Prague:Ministry of

Regional Development

Ministry of Tourism, Trade and Industry (MTTI) (2002) Draft Tourism Policy for Uganda, Version

24, The Republic of Uganda.

Moore, M. and Putzel, J. (1999) Politics and Poverty: A Background Paper for the World

Development Report 2000/1, Brighton: Institute of Development Studies at the University of

Sussex (mimeo).

Nicanor, N. (2001) ‘Practical Strategies for Pro-Poor Tourism. NACOBTA – The Namibian CaseStudy’. PPT Working Paper No. 4. www.propoortourism.org.uk. ODI, IIED, CRT, London. PPT Working Paper 12 Tourism in Poor Rural Areas

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Ntshona, Z. (2002) ‘Community-Based Eco-Tourism in the Wild Coast District: Livelihoods,

Ownership and Institutional Dynamics in the Horse and Hiking Trail run by the Amadiba

Community’

Opio, D. (2002) ‘End-of-Project Independent Evaluation Report for Heritage Trails Uganda’ Desam

International Consultants Ltd, Kampala.

Rogerson, C.M., (2002) 'Tourism and local economic development: the case of the Highlands

Meander', Development Southern Africa Vol 19, 143-167

Slee, B., Farr, H and Snowdon, P. (1997) ‘The Economic Impact of Alternative Types of Rural

Tourism’ Journal of Agricultural Economics 48 (2), pp. 170-192

Start, D. (2001) ‘Livelihood Insecurity and Social Protection: A Re-emerging Issue in Rural

Development’, Development Policy Review, 19 (4), London: Blackwell Publishing

UNDP/WTO (1993) Republic of Uganda Ministry of Tourism, Wildlife & Antiquities Integrated

Tourism Master Plan (UNDP/WTO UGA 91/010) Final Report, United Nations Development

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Location for Rural Development’, Development Policy Review, 19(4). London: Blackwell

Publishing

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Association: a comparison with NACOBTA’, PPT Working Paper No. 5, ODI, IIED AND

CRT, London.

Tour

 

ism Development: Outline

of Advantages and Disadva

ntages 

 

WE W

 

Advantage (depending upon implementation some of these can turn into disadvantages)

employment (1 emp/1000 tourist) (labor intensive, few administrative positions, little upward mobility.)

infrastructure development (roads, water, electricity, telecom and cybercom, but not necessarily local priorities.)

cultural preservation (economic incentives to preserve food, fashion, festivals and physical history, but these tend to be superficial elements of a culture.)

environmental protection (econ incentives to preserve nature, wildlife and urban cleanliness)

foreign exchange (generates resources to import food, pharmaceuticals, technology, consumer goods.)

development of health care services (those these aren't always available to local people.)

Disadvantages (depending upon implementation some of these can turn into advantages)

cultural destruction, (modernization (world mono-culture), freezes culture as performers, loss: language, religion, rituals, material culture.)

primary products (sun, sand, surf, safari, suds, ski, sex) (little value added, neo-colonialism)

environmental destruction (game drives, resorts: golf, ski, beach, desert, world as play ground, SUV.)

marginal employment (low skill, low wage, menial services, prostitution, drug trade, gambling, hustlers.)

low benefits (no job security, no health care, no organizing, no work safety rules or enviro standards.)

development of illegal and/or destructive economic activities (markets for drugs, endangered species, etc.)

OULD LOVE

YOUR SUPPORT!

Our content is 

provided free a

outside hiring (skilled middle and senior management recruited out of the area and transferred in.)

concentration employment (walled resort enclaves.) seasonal employment outside decision making (decisions made outside of the area, corporate

dollars corrupt government.) unrealistic expectations (divert young people from school and brighter

futures.) anti-democratic collusion (industry support of repressive governments) land controlled by the elite (people relocated, agriculture eliminated,

prohibited from N.P.) negative lifestyle's (STD's, substance abuse, begging, hustling) diverted and concentrated development (airport, roads, water, electricity

to tourist destinations, development not accessible to locals), little forex stays in country (airplanes, vehicles, booze, hot air balloons,

generally have foreign owners), package programs cruises (eat and sleep on board so the economic benefits to the ports-of-

call is very thin and limited.) unstable market (fickle, affected by local and world events, generally

highly elastic) health tourism (traveling to get medical procedure at lower cost) has it

own set of unique challenges, which include: Determining the credential, skills and quality of the facility and personnel. Language communication challenges on topics requiring a lot of details, sometimes even when both parties seemingly speak the same language. Different cultural issues and expectations around health care and the body.  Post-treatment complications, after the "tourist" has left the facility.

Solutions (for visitor)

act to support cultural diversity engage in activities that add value to the community don’t do activities that deteriorate the environment don’t engage in illegal activities act to disperse the benefits patronize locally (community) owned enterprises.

Solutions (for the host)

support the traditional cultural legacy training and education in local culture, history, natural science, etc. select development and activities that draw from local traditions and

add value to the community don’t promote activities that deteriorate the environment

s 

a public service!

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don’t engage in illegal activities adopt a program to disperse the benefits patronize locally produced products and locally (community) owned

enterprises. make business and foreign exchange transactions transparent and

efficient.

We don't really see a different list of pros and cons for tourism in rural and urban areas. Rural or urban, the result largely depend upon how the business is conducted: Are visitors coming and supporting what the community prides itself in and in a way that perpetuates and sustains (or improves) the quality of life in the community)? Are are the activities of the tourist detrimental to the values, environment and culture of the community in the long run?

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Ab o u t t h e Re p oRt

This report examines the notion that tourism can help deliver

peace and prosperity to developing countries by examining

relationships among tourism, development, and conflict in

three countries: Kenya, Nigeria, and India. The case studies

were commissioned as part of the 2008 Travelers’ Philanthropy

Conference held in Arusha, Tanzania. The three-day conference

was attended by 225 delegates from five continents. Nobel

laureate Dr. Wangari Maathai, founder and leader of Kenya’s

Green Belt Movement, gave the keynote address. USIP’s Center

for Sustainable Economies commissioned the case studies used

in this report from participants attending the workshop.

Martha Honey, co-founder and co-director of the Center for

Responsible Travel (CREST), heads its Washington, D.C., office.

She has written and lectured widely on ecotourism, travelers’

philanthropy, and certification issues and holds a PhD in

African history. Her books include Ecotourism and Sustainable

Development: Who Owns Paradise? Raymond Gilpin is associate

vice president for Sustainable Economies at USIP. He leads the

Institute’s work on analyzing economic relationships during

all stages of conflict. He holds a doctorate from Cambridge

University in the United Kingdom.

The authors are grateful for comments from Professor

Timothy L. Fort, Lindner-Gambal Professor of Business

Ethics and executive director of the Institute for Corporate

Responsibility at George Washington University, and Marie

Pace, program officer at USIP. Go Funai (research assistant,

USIP), Richard Downie (consultant, USIP), and Bethany

Wylie (intern from Stanford University with the Center for

Responsible Travel) also contributed to this paper.

1200 17th Street NW • Washington, DC 20036 • 202.457.1700 • fax 202.429.6063

Sp e c iAl Re p oRt 233 oc t o b eR 2009

© 2009 by the United States Institute of Peace.

All rights reserved.

Martha Honey and Raymond Gilpin

Tourism in the

Developing World

Promoting Peace and Reducing Poverty

Summary

• Although often underestimated, the tourism industry can help promote peace and stability

in developing countries by providing jobs, generating income, diversifying the economy,

protecting the environment, and promoting cross-cultural awareness. Tourism is the fourthlargest industry in the global economy.

• However, key challenges must be addressed if peace-enhancing benefits from this industry

are to be realized. These include investments in infrastructure and human capacity, the

development of comprehensive national strategies, the adoption of robust regulatory

frameworks, mechanisms to maximize in-country foreign currency earnings, and efforts to

reduce crime and corruption.

• The case studies of India, Kenya, and Nigeria reveal several important points. First, relative

peace and a degree of economic development are preconditions for a successful tourist

industry. Second, although it has the capacity to help promote peace and prosperity, tourism can also cause a great deal of harm unless it is carefully developed. Third, to deliver

optimal benefits, tourism must be respectful of the environment and mindful of cultural

and social traditions. Fourth, tourism must be supported by a coherent national strategy

and robust laws.

• For tourism to help deliver prosperity and stabilize communities effectively, specific action

must be taken by three main constituencies: host communities, host governments, and foreign stakeholders. Host communities should work to leverage their competitive advantage,

improve service delivery, and protect their environment and culture. Host governments

should establish supportive strategies, introduce and implement necessary regulations,

remove bottlenecks, and adopt internationally recognized tourism standards. Foreign stakeholders could prioritize tourism as a viable economic force, direct investment to this sector,

and facilitate knowledge and technological transfers.

UNITeD STATeS INSTITUTe of PeACe www.usip.org

SPeCIAL RePoRT

co n t e n tS

Ecotourism 3

About the Case Studies 3

Addressing the Challenges 8

Conclusions 9

Policy Recommendations 92

Tourism is a vital part of the global economy. Generating roughly $1 trillion in global receipts

in 2008 (up 1.8 percent from 2007), international tourism ranked as the fourth-largest

industry in the world, after fuels, chemicals, and automotive products.

1

The breadth of

international travel also has greatly expanded in recent years to encompass the developing

world. In 1950 just fifteen destinations—primarily European—accounted for 98 percent of

all international arrivals. By 2007 that figure had fallen to 57 percent.

2

Once essentially

excluded from the tourism industry, the developing world has now become its major growth

area. Tourism is a key foreign exchange earner for 83 percent of developing countries and

the leading export earner for one-third of the world’s poorest countries.

3

For the world’s

forty poorest countries, tourism is the second-most important source of foreign exchange

after oil.

4

The economic might of the tourist industry has helped transform societies, often for the

better. Tourism has several advantages over other industries:

• It is consumed at the point of production so that it directly benefits the communities that

provide the goods.

• It enables communities that are poor in material wealth but rich in culture, history, and heritage to use their unique characteristics as an income-

generating comparative advantage.

• It creates networks of different operations, from hotels and restaurants to adventure sports

providers and food suppliers. This enables tourist centers to form complex and varied supply

chains of goods and services, supporting a versatile labor market with a variety of jobs for

tour guides, translators, cooks, cleaners, drivers, hotel managers, and other service sector

workers. Many tourism jobs are flexible or seasonal and can be taken on in parallel with

existing occupations, such as farming.

• It tends to encourage the development of multiple-use infrastructure that benefits the host

community, including roads, health care facilities, and sports centers, in addition to the

hotels and high-end restaurants that cater to foreign visitors.

With these benefits in mind, the United Nations has identified the development of tourism

as one of the methods poorer countries might use to meet the Millennium Development

Goals (MDGs).

5

For the first MDG—alleviating poverty—the merits of tourism are evident.

It can provide jobs and generate income for communities that, in some cases, lack viable

alternative means of employment. In an assessment of Nigeria’s potential for tourism,

Francesco Frangialli, the former head of the UN World Tourism Organization, argued that

with its “capacity to spread its socioeconomic benefits to all levels of society … tourism

can be a leading industry in the fight against poverty.”

6

With its tendency to produce flexible labor markets and offer diverse working opportunities, tourism can also help realize a

second MDG, that of promoting gender equality. In Mali, the World Tourism Organization’s

Sustainable Tourism for Eliminating Poverty (ST-EP) program has supported an effort to train

the female artisans of Djenne, one of Mali’s oldest and most visited towns. In Costa Rica,

women’s handicraft cooperatives catering to the tourist market have flourished, providing

many women, for the first time, with both independent incomes and improved self-esteem.

If carefully managed, tourism can also be an important part of promoting a sustainable environment, another of the MDGs. Frangialli identified tourism’s potential for not only protecting the natural environment, but also “preserving historical, archaeological, and religious

monuments; and stimulating the practice of local folklore, traditions, arts and crafts, and

cuisine.”

7

Finally, as tourism by definition involves the transfer of people, culture, and ideas,

it is ideally placed to foster effective global partnerships, the eighth MDG.

In addition to advancing development goals, some have credited tourism with helping to

build and sustain peace. Among them is Wangari Maathai, the Nobel laureate and founder of

The views expressed in this report do not necessarily

reflect the views of the United States Institute of Peace,

which does not advocate specific policy positions.

To request permission to photocopy or reprint materials,

e-mail: permissions@usip.org

Ab o u t t h e inSt i t u t e

The United States Institute of Peace is an independent,

nonpartisan institution established and funded by Congress.

Its goals are to help prevent and resolve violent conflicts,

promote post-conflict peacebuilding, and increase conflict

management tools, capacity, and intellectual capital worldwide. The Institute does this by empowering others with

knowledge, skills, and resources, as well as by its direct

involvement in conflict zones around the globe.

boA Rd o f diRe c t oR S

J. Robinson West (Chair), Chairman, PFC Energy, Washington,

D.C. • George e. Moose (Vice Chairman), Adjunct Professor

of Practice, The George Washington University, Washington,

D.C. • Anne H. Cahn, Former Scholar in Residence, American

University, Washington, D.C. • Chester A. Crocker, James R.

Schlesinger Professor of Strategic Studies, School of Foreign

Service, Georgetown University, Washington, D.C. • Ikram U.

Khan, President, Quality Care Consultants, LLC., Las Vegas,

Nev. • Kerry Kennedy, Human Rights Activist • Stephen D.

Krasner, Graham H. Stuart Professor of International Relations at Stanford University • Jeremy A. Rabkin, Professor

of Law, George Mason University, Arlington, Va. • Judy Van

Rest, Executive Vice President, International Republican

Institute, Washington, D.C. • Nancy Zirkin, Executive Vice

President, Leadership Conference on Civil Rights

MeMb e r s ex Of f i c iO

Hillary Rodham Clinton, Secretary of State • James N. Miller,

Principal Deputy Under Secretary of Defense for Policy • Ann e.

Rondeau, Vice Admiral, U.S. Navy; President, National Defense

University • Richard H. Solomon, President, United States

Institute of Peace (nonvoting)3

the Green Belt Movement, who highlights tourism’s potential as “a great vehicle for peace

promotion.”

8

Whether tourism can actually bring about peace or whether the relationship is

better described as mutually reinforcing, Corazon Gatchalian and Cindi Reiman conclude that

through its tendency to promote “communication between nations and

cultures,” tourism is

an instrument that “creates a global language of peace.”

9

That said, while tourism can bring positive benefits, good does not necessarily follow. In

recent years, tourism has tended to be a delivery mechanism for some of the darker effects

of globalization: health pandemics and terrorism. International travelers enabled the outbreaks of severe acute respiratory syndrome (SARS) and swine flu to spread rapidly across

borders. And holiday destinations, tragically, have become a popular target for terrorists,

who want to maximize civilian casualties and publicity for their actions. In recent years,

Mumbai, Bali, Sharm el-Sheikh, Dahab, Mombasa, and Casablanca have come to be associated as much with mass bombings and killings as with tourism.

ecotourism

While conventional mass tourism often negatively affects host environments, other forms of

tourism have emerged in recent decades that are more sensitive to their surroundings and

offer tangible benefits to the local labor force. These newer forms of tourism have come

to be known as ecotourism, an umbrella term best defined as responsible travel to natural

areas that conserves the environment and improves the well-being of local people.

10

Since it

first emerged in the late 1970s, ecotourism has spawned several other travel concepts that

are, in essence, variations on the same theme. These include geotourism, pro-poor tourism, sustainable tourism, responsible tourism, and travelers’ philanthropy. They are united

by the simple idea that tourism should offer a benefit—and not incur a cost—to the host

community. They reflect the desire of many holiday goers to give something back to the

places they visit, or at the very least, avoid doing them harm. A number of countries have

tailored their tourism industries adeptly to reflect this desire and have reaped economic

rewards while minimizing the environmental and social impacts of growth. Costa Rica led

the way in developing the ecotourism concept, followed closely by Ecuador, Tanzania, Kenya,

and Nepal.

This report explores the ecotourism model, arguing that, if implemented correctly, it can

reduce poverty and promote peace in the developing world. It uses three case studies—Kenya, India, and Nigeria—to explore some of the ways in which tourism can enable peace and

prosperity. It also analyzes some of the necessary preconditions for developing a responsible tourist industry, highlighting that ill-planned and poorly executed tourism can cause

immense damage to communities and create conditions for conflict instead of peace.

About the Case Studies

Kenya, Nigeria, and India are three developing countries with tourism industries at different

stages of maturity. Kenya has a long-established and highly successful tourist sector catering to the conventional and ecotourism markets. As the table demonstrates, international

tourism is a lucrative source of income for Kenya, accounting for 2.24 percent of the nation’s

gross domestic product (GDP) in 2006. By contrast, Nigeria barely has a tourist industry at

all, reflected by tourism’s paltry contribution to national wealth, just .02 percent of GDP in

2006. India has several tourist centers but, given its vast size, it has yet to realize tourism’s

economic potential. International receipts from tourism made up just 0.35 percent of its GDP

in 2006. With the case studies, we examine whether or not tourism in developing countries

has a role in laying down what Martha Honey of the Center for Responsible Travel calls the

While tourism can bring

positive benefits, good does

not necessarily follow. In recent

years, tourism has tended to

be a delivery mechanism for

some of the darker effects of

globalization: health pandemics

and terrorism.4

Tourism Statistics, 1990-2006

Country 1990 1995 2000 2001 2003 2006

Kenya

International arrivals

(thousands)

814 937 1,037 995 1,146 1,840

Nights spent by

residents (thousands)

n.a. n.a. 794 740 739 n.a

International receipts

(millions of U.S. dollars)

443 486 500 536 619 1,182

GDP-PPP (billions

of U.S. dollars)

25.7 31.1 37.4 40.2 43.0 52.7

International receipts

(percent of GDP)

1.72 1.56 1.34 1.33 1.44 2.24

India

International arrivals

(thousands)

1,707 2,124 2,649 2,537 2,726 4,447

Domestic tourism

visits (thousands)

n.a. 136,644 220,107 236,470 309,038 461,763

International receipts

(millions of U.S. dollars)

1,513 2,581 3,718 3,497 4,560 9,227

GDP-PPP (billions

of U.S. dollars)

721.2 1,038.6 1,519.5 1,616.5 1,876.6 2,668.8

International receipts

(percent of GDP)

0.21 0.25 0.24 0.22 0.24 0.35

Nigeria

International arrivals

(thousands)

n.a. 1,031 1,492 1,753 2,253 3,056

Domestic tourism

visits (thousands)

n.a. n.a. n.a. n.a. n.a. n.a.

International receipts

(millions of U.S. dollars)

190 656 813 168 58 51

GDP-PPP (billions

of U.S. dollars)

90.9 105.2 134.0 148.4 206.2 268.2

International receipts

(percent of GDP)

0.21 0.62 0.61 0.11 0.03 0.02

GDP = gross domestic product. PPP = purchasing power parity. n.a. = not available.

Source: World Tourism Organization database.

“building blocks of peace,” defined as “social justice, economic equity, sustainable development, and broad based democracy.”

11

A mixed picture emerges. In Kenya, which has had a longer time to finesse its strategy,

ecotourism is starting to bring about the progress that Honey describes. Conservationist

David Western,

12

the author of a study of Kenya’s tourism industry,

13

explains how Kenya

learned from some of the mistakes it made when it began building its safari-based tourism

industry. He discusses how Kenya became the first country in Africa to establish both an

ecotourism society and a framework for assessing the social and environmental

impact of

resort developments. He also illustrates the importance of generating domestic tourism by

offering free or heavily discounted national park fees to its citizens. Most important, he

shows how Kenyan communities have benefited directly from tourism by running their own

wildlife conservation areas. However, the picture he paints is not overwhelmingly rosy. While

pockets of good practice exist, a fair share of Kenya’s tourism tramples on local customs, is

indifferent to conservation, and fails to pass on economic benefits to host communities.

The Nigeria case study, by Bola Olusola Adeleke,

14

closely examines Honey’s idea of building blocks of peace from the perspective of a country that is still in the formative stages

While pockets of good practice

exist, a fair share of Kenya’s

tourism tramples on local

customs, is indifferent to

conservation, and fails to pass

on economic benefits to host

communities.5

of developing a tourism sector. In her analysis, Adeleke argues that, while tourism may

well promote peace, peaceful conditions have to be in place before tourism can

thrive. The

lack of peace and security, she argues, is the main reason why Nigeria has been unable to

persuade foreigners to visit its many cultural and natural attractions. In addition, she identifies a string of other societal problems—poverty, corruption, a lack of infrastructure—that

contribute to Nigeria’s failure to establish a tourist industry. For Adeleke, Nigeria faces a

catch-22 scenario, whereby tourism has the potential to promote peace and development

but can only take root in areas where peace and development are already present.

The third case study offers a reminder that tourism is not a magic bullet with the ability to transform developing countries for the better. Aditi Chanchani

15

of EQUATIONS, an

Indian nongovernmental organization (NGO) that promotes good practice in the tourism

industry, shows that her country has a lot of work to do in developing a sustainable tourism

model that delivers benefits to local communities. Her examples show that if the tourism

industry is not properly regulated, it can do harm, developmentally, socially, culturally, and

politically. She also argues forcefully that regulations alone are not enough; they have to be

applied and there must be penalties for those who ignore them.

Although Kenya, Nigeria, and India differ significantly in how they have sought to develop tourism, it is possible to draw some common lessons from

their experiences. The first is

that certain levels of peace and economic development are preconditions for tourism. But

tourism, in turn, can strengthen existing conditions of peace and development. However,

everything depends on the way it is managed. As Honey emphasizes, “Tourism promotes

peace only when it is done in ways that involve and benefit the destination.”

16

Ecotourism

could provide a blueprint for managing this process, as it not only builds entrepreneurial

skills at a local level but also links community members to the larger world in ways that create knowledge, understanding, and appreciation of other peoples (e.g., clients, the chain of

marketing, sales, transport). Ecotourism exposes communities to a social network and gives

them both a reason and the skills to manage social networks in order to benefit themselves;

the knowledge and communication linkages that tourism creates, for their part, depend on

and promote fair practices, stability, and peace.

Kenya

East Africa is a natural destination for tourists, boasting the richest and most varied concentration of wildlife on the continent. Kenya spotted the potential for tourism quickly,

opening its first national park in 1947 and building a flourishing industry based around the

safari. Unplanned and unsympathetic development, however, led to Kenya

becoming the

“Costa Brava of the wildlife world,” by the 1990s, providing mass tourism commonly associated with the resorts of the Spanish coast.

17

Since then, Kenya has pursued ecotourism

with more determination, backed by national legislation aimed at protecting wildlife and

representing communities, but Western contends that “for the moment, the worst of tourism

is outstripping the best of ecotourism.”

18

Although progress has been patchy, Western concedes that Kenya’s ecotourism has been

able to deliver concrete benefits to its people. Involving local communities is one of its

central tenets. Thus, admission fees for Kenyans to visit national parks were slashed, providing an important boost to domestic tourism. Ordinary Kenyans also have been involved in

developing tourism in their areas, and through programs such as Parks Beyond Parks, have

been given the lead role in managing and conserving wildlife areas in their own communities. As a result, tourism has helped provide employment and alleviate poverty, the first of

the United Nations’ MDGs. The stronger focus on ecotourism has also aided Kenya’s progress

toward achieving another MDG, that of environmental sustainability.

Ecotourism could provide a

blueprint for managing this

process, as it not only builds

entrepreneurial skills at a local

level but also links community

members to the larger world in

ways that create knowledge,

understanding, and appreciation

of other peoples.6

One of the most important advantages of tourism, according to Western, is that it tends

to have a snowball effect, generating revenue in indirect ways. Donor countries are more

likely to give aid and support to nations that their citizens visit, and where tourists beat

a path, businesses and NGOs often follow. Although difficult to quantify, this hypothesis

merits further study.

In his explanation of the growing importance of ecotourism, Western gives most of the

credit to individual travelers rather than the Kenyan government. Ecotourism, he argues,

reflects “the traveler’s urge to do good.” This enables ecotourism to “grow spontaneously through contagious social responsibility, rather than by rules and regulations and

policies.”

19

In Western’s view, more can be done to capitalize on the willingness of individual travelers to give something back to the communities they visit. The best model for

tourism, he argues, should combine the responsible approach of ecotourism with travelers’

philanthropic impulse to contribute to developing their holiday destinations. Western cites

the example of the African Conservation Fund, the U.S. arm of two domestic NGOs, which

organizes safaris and visits to Kenyan community projects; there, tourists are able to make

tax-deductible charitable contributions.

20

While there is a clear risk that such projects could

fuel a dependency culture, they are a powerful way of directing wealth to communities in

a virtually unmediated way. Kenya’s experience demonstrates that tourism can positively

affect development and help lay down the building blocks of peace, provided it respects

of the environment, works closely with host communities, and harnesses the philanthropic

impulses of overseas visitors.

Nigeria

The story of Nigeria’s tourism industry is one of unfulfilled potential, according to Adeleke.

21

Theoretically, the country is tailor-made for tourism: Its 370 ethnic groups give it a rich

cultural heritage and it is blessed with natural wonders, unique wildlife, and a very favorable

climate. Yet very little effort has been undertaken at the national level to develop tourism.

Nigeria did not establish an official tourist board until 1976 and only in the 1990s did it

formulate a national tourism policy. Most foreign visitors come to Nigeria for business or

family visits.

What is the reason for this oversight? According to Adeleke, the enabling environment

for tourism simply does not exist. For tourism—particularly international tourism—to

flourish, a nation needs to be peaceful and safe. For most of its postindependence history,

Nigeria has been a byword for political instability, violence, ethnic rivalry, and crime. The

challenges of marketing its tourist credentials are laid bare by the U.S. State Department

advisory for the country, which gives even the most intrepid traveler pause. U.S. citizens are

warned of the dangers of “violent crime in Lagos and other large cities as well as on roads

between cities,” the prevalence of “armed muggings, kidnappings and carjackings,” and the

risk of ethnic conflict. They are urged to avoid “all but essential travel” to the Niger Delta,

the scene of years of violence among local citizens, international oil companies, and the

Nigerian military.

22

Tourism, if established, could help promote peace. In addition, a robust

tourist sector would diversify the economy, reducing Nigeria’s dependence on its most

important export—oil—which is also the source of many of the country’s social, political,

economic, and environmental problems. Clearly, however, tourism cannot gain a foothold in

societies that are prone to conflict and instability.

Moreover, to thrive, tourism requires more than just an absence of conflict. Adeleke

points to several other structural problems within Nigeria that complicate efforts to build

a strong tourism sector. Poor infrastructure is a particular barrier. Nigeria is a large country

with a small and badly maintained road network. Tourists would struggle to travel between

Tourism tends to have a

snowball effect....Donor

countries are more likely to give

aid and support to nations that

their citizens visit, and where

tourists beat a path, businesses

and NGOs often follow.

A robust tourist sector would

diversify the economy, reducing

Nigeria’s dependence on oil, the

source of many of the country’s

social, political, economic, and

environmental problems.7

different regions. Parts of the country, such as the Niger Delta, are almost completely cut

off (and dangerous). Poverty hinders domestic tourism, but even those who have the means

have not developed a culture of travel. Another important barrier to tourism is the absence

of organization and institutional capacity at a national level. For most of its history, Nigeria has not had a national tourism strategy, and government departments overlap at the

national and regional levels regarding responsibility for the sector, making it difficult to

devise a coordinated plan. The government does not even possess reliable figures on the

numbers of international arrivals to and departures from the country. Corruption is another

serious deterrent, as it undermines government efficiency, deters potential investors in the

tourism industry, and scares off visitors.

In sum, while tourism can be of enormous benefit to developing nations, setting up a

fully functioning tourist industry is beyond the capacity of many. Without a modicum of

peace and stability, combined with strategic planning at a national level, a country will

struggle to persuade tourists to risk a visit.

India

Aditi Chanchani’s case study of India illustrates the tensions that could exist among tourism,

development, and peace. While sustainable and responsible tourism could promote development, poorly implemented projects that do not consider local rights and opinions can hobble

development and sow the seeds of conflict.

Despite its vast size and wealth of cultural and natural attractions, India has not been

able to turn tourism into a major dynamo of its economy. Tourism has developed in pockets:

in Goa, Kerala, and the central region around New Delhi, for example, rather than in the

country as a whole. India suffers from some of the obstacles Nigeria faces. Travel infrastructure is patchy, much of the population is poor, and the national government has struggled

to provide a strategic vision for the tourism sector. In addition, safety has become a more

prominent concern for tourists, following a series of terrorist attacks that targeted highprofile sites frequented by foreign visitors. The coordinated attacks in Mumbai in November

2008 ended the steady rise in international arrivals seen since 2002. It is too early to assess

the attacks’ full effect, but tourist numbers were expected to fall approximately 15 percent

during 2009 in the wake of both the attacks and the global economic recession.

23

For Chanchani, tourism has too often failed to pass on economic and social benefits to

host communities because the national strategy has been fixated on numbers—

what she

calls “arrivals, expenditures and receipts.”

24

Many tourist developments are owned by outside investors looking to make quick profits rather than provide sustainable growth over the

long term. As a result, Chanchani believes that tourism has undermined efforts to fulfill the

MDGs. Gender equality has been negatively affected by some of the social problems associated with mass tourism, such as wage exploitation and prostitution. Unplanned and poorly

implemented tourist resorts, golf courses, and amusement parks have caused ecological

damage, setting back attempts to meet the United Nations’ MDG on environmental sustainability. Chanchani shows that insensitive tourist developments can displace people and

destroy traditional livelihoods, leaving many with no alternative but to take up low-paying

and exploitative jobs in the tourist sector.

Chanchani acknowledges that tourism can promote peace, but adds that “for this to be

possible one must engage with the reality, the history and the aspirations of those in the

places that are being visited.”

25

Too often, the negative face of tourism stokes conflict.

Chanchani cites the example of India’s central belt, a region that has been targeted for tourism development where communities have been moved off their ancestral lands to make way

for what are billed as ecotourism projects. These disputes feed into a long-

running Maoist

While tourism can be of

enormous benefit to developing

nations, setting up a fully

functioning tourist industry is

beyond the capacity of many.

Insensitive tourist developments

can displace people and destroy

traditional livelihoods, leaving

many with no alternative but

to take up low-paying and

exploitative jobs in the tourist

sector.8

insurgency, which has turned increasingly violent as the region has been opened up.

Chanchani argues that lax regulations are largely to blame for the problems facing tourism in her case study. The government fails to properly police the tourism industry, allowing

some local developers to disregard the rules and the wishes of local communities. India’s

environmental legislation is designed to protect ecologically fragile areas from development, but it has been watered down or simply ignored. In Goa, resorts and hotels have

sprung up along the coast in clear violation of the rules. Chanchani also criticizes the state

governments of Maharashtra and Himachal Pradesh for bending strict land

ownership rules

to clear the way for large tourist developments. Many of these projects have been carried

out under the banner of ecotourism, yet emphatically do not preserve the local environment

or benefit local people, who are rarely consulted and, in some cases, are shunted off their

land to make way for luxury hotels, ski resorts, and amusement parks. The example of India

suggests that tourism cannot help alleviate poverty and promote peace unless it is properly

regulated and genuinely engages with host communities.

Addressing the Challenges

If tourism is to achieve its full potential as a force for promoting peace and prosperity,

several challenges must be addressed:

• Bad neighborhood effect: The case study of Nigeria shows that peace and security are preconditions for a thriving tourism sector. Travelers are risk averse and do not wish to spend

their vacation feeling anxious about their personal safety, mindful of their belongings, and

wary of being ripped off. Developing countries with ambitions to build a successful tourist

industry need to tackle internal instability and provide a safe environment for potential

visitors. Unfortunately, unrest and instability in neighboring states are also disincentives

to travel to potential tourist destinations. Countries that are perceived to be in so-called

bad neighborhoods are affected by this.

• Investments: Solid infrastructure is another precondition for any country wishing to establish a tourism industry. Poor countries need to prioritize the search for capital investment

to help them build the roads, airports, hotels, and leisure facilities needed to attract visitors

in large numbers. Investments in human capacity are equally important. Local communities

need special training to work in the international hospitality industry. Local drivers may

have to meet more exacting safety standards to chauffeur tourists around than might be

expected of them in the domestic market. The hotel industry expects that people who work

with foreign visitors be culturally aware of and sensitive to the expectations and foibles of

a wide range of nationalities. All of this requires training.

• Regulations and standards: The India case study demonstrates that tourism needs to be

subject to robust laws and regulations if it is to benefit local communities and prevent

them from being exploited. Laws must protect the environment from overdevelopment and

safeguard the land, property, and livelihoods of communities affected by tourism. But laws

in themselves are insufficient: They must be applied and enforced. This requires the presence of strong and effective institutions, at national and local levels.

• Structural leakages: Developing countries must try to capture more tourism spending and

limit leakage if they are to maximize their revenues from tourism. An international hotel

chain that opens up in a developing country may create jobs in the local community, but

it repatriates the profits. In a similar way, host communities might decide that, to keep

tourists happy, they have to offer them food and drink they are familiar with—which has

to be imported. Homegrown tourism, on the other hand, allows revenue to remain in the

domestic economy rather than seep across borders. 9

• Ecotourism, not tourism numbers: Governments need to emphasize implementing the sound

principles and best practices of ecotourism rather than fixating on increasing tourism

numbers. High-quality ecotourism can bring more revenue and decrease the harmful social

and environmental effects of uncontrolled mass tourism. Four decades ago, resort tourism

was the norm and model. Today, a variety of alternative tourism models provide the tools

to bring prosperity and strengthen conditions for peace in poor countries.

• Strategic oversight: Tourism cannot grow into a thriving sector of the economy without

constructive leadership from the national government. Too many countries fail to reap

the rewards of tourism because of poor planning, poorly thought-out strategies, and

fragmented policies. Strategic oversight includes everything from overall budget planning

and encouraging outside investment to educating host communities. Without guidance

from local and national governments, host communities are likely to find the experience

unsettling and negative.

Conclusions

Tourism is a thriving global industry with the power to shape developing countries in both

positive and negative ways. The tourism sector has remained robust despite the transnational challenges posed by terrorism, health pandemics, and the global financial crisis. In

2007, international tourist arrivals passed 900 million; the United Nations predicts they will

reach the 1 billion mark by 2010.

26

It is up to developing nations to seize the economic

opportunities that foreign visitors present, and some countries have proved more adept

than others at doing so. Kenya has developed a lucrative tourism sector, powered in recent

years by ecotourism, and some local communities have benefited directly through social and

economic development. India’s attempts to build a sustainable tourism sector have been

undermined by lax regulations, unplanned development, and insensitive attitudes toward

host communities, many of which have not seen any tangible benefits. In Nigeria, structural

weaknesses, insecurity, and poor leadership have locked the country out of the

benefits that

tourism can offer.

The three case studies demonstrate that while tourism can be a force for good—both in

alleviating poverty and helping to cement peace—much depends on the way the sector is

planned and managed. Tourism can only achieve the above goals if it respects the environment and places host communities at the center of the development process. Responsibility

lies with the governments of developing nations to ensure that tourism grows in a sustainable manner. But, as the case study of Kenya shows, individual tourists also have a part

to play. As the driving force behind the ecotourism movement, they have shown that the

choices they make as consumers can determine whether tourism takes a path that helps or

hinders development in poorer countries.

Policy Recommendations

As delineated above, tourism, if properly planned and managed, can help to alleviate poverty and stabilize communities. For that to happen, positive action must be taken by three

main constituencies: host communities, host governments, and foreign stakeholders.

Host communities should:

• Leverage advantage. Communities should know where their comparative advantage lies—

whether it is in wildlife, waterfalls, or wineries—and focus their development strategy

around it, rather than expanding into areas that they think will attract visitors

but with

which they are unfamiliar.

While tourism can be a force

for good—both in alleviating

poverty and helping to cement

peace—much depends on the

way the sector is planned and

managed.10

• Focus on keeping themselves at the center of their development strategy. This will ensure

local ownership of projects and help to keep profits in house. Community-based tourism

is also more sustainable and helps to provide the type of authentic experience that most

tourists are looking for.

• Work on enhancing capacity, in both physical infrastructure and human capital. To fund these

improvements, communities should follow the approach advocated by David Western

27

and

target the enormous potential that travelers’ philanthropy presents.

• Protect the environment and culture. Communities should remember at all times that it is

the beauty of the surroundings in which they live, the richness of their culture, and the

diversity of their wildlife that attracts visitors in the first place. A percentage of the wealth

that tourism generates should be spent to preserve these qualities.

Host governments should:

• Establish national tourism strategies and put in place robust laws to protect tourist sites

and people who work in the tourist industry. They should also ensure that these laws are

enforced. National standards should be established for the tourism industry and its employees should receive periodic training and guidance.

• Address bottlenecks and constraints. In many developing countries, tourism is undermined

because no single government branch has overall responsibility for it. A government should

ensure that its tourism sector is not undermined by competing or overlapping departments,

at either the national or local levels.

• Have a creative marketing strategy for the tourist industry. The global tourism trade is highly

competitive. Developing countries need to think about what sets them apart from other

potential destinations and focus on marketing these distinctive qualities. Having a clear

focus will also make it easier to attract foreign investment and visitors.

foreign stakeholders should:

• Prioritize tourism as an economic force. Tourism is a hugely influential and profitable industry

and many developing countries are keen to be a part of it. However, they are

short of capital

and infrastructure. Foreign firms can provide both and earn a profit at the same time.

• Facilitate knowledge and technology transfers and offer technical assistance. Fledgling tourism sectors in developing countries need assistance in training staff and teaching new

skills. Foreign experts from established tourist markets are well placed to offer assistance.11

Notes

1. UN World Tourism Organization (UNWTO), Tourism Highlights, 2008 Edition (Madrid: UNWTO, 2008) and World

Tourism Barometer (June 2009).

2. UNWTO, Tourism Highlights, World Tourism Barometer.

3. Lisa Mastny, Treading Lightly: New Paths for International Tourism, Worldwatch Paper 159 (Washington, DC:

Worldwatch Institute, 2001), p. 15.

4. Mastny, Treading Lightly, p. 37.

5. The MDGs are to eradicate extreme poverty and hunger, achieve universal primary education, promote gender

equality and empower women, reduce child mortality, improve maternal health, combat HIV/AIDS and other

diseases, ensure environmental sustainability, and develop a global partnership for development, all by 2015.

6. Message by the Secretary-General, in Nigeria Tourism Development Master Plan: Institutional Capacity Strengthening

to the Tourism Sector in Nigeria (Madrid: UNWTO, 2006).

7. Secretary-General, Nigeria Tourism.

8. Keynote address to the Travelers’ Philanthropy Conference, Arusha,

Tanzania, December 2008.

9. Corazon Gatchalian and Cindi Reiman, “Opportunities to Provide World Peace Through Structured Training in

Hospitality.” Presented to the American Hotel and Lodging Association, Michigan, 2005.

10. Definition provided by the International Ecotourism Society.

11. Martha Honey, “Tourism: Preventing Conflict, Promoting Peace,” paper commissioned for USIP, p. 2.

12. David Western is founder and chairman of the Africa Conservation Centre in Nairobi, the former director of the

Kenya Wildlife Service, and the first board chair of the International Ecotourism Society (TIES).

13. David Western, “Ecotourism, Conservation and Development in East Africa: How the Philanthropic Traveler Can

Make a Difference.” Paper commissioned for 2008 Travelers’ Philanthropy Conference, Arusha, Tanzania. Available

from the Center for Responsible Travel (www.responsibletravel.org).

14. Bola Olusola Adeleke is a lecturer in the Department of Transport and Tourism Studies at Redeemer’s University

in Redemption City, Oye State, Nigeria.

15. EQUATIONS is a research, policy advocacy, and campaigning organization working on tourism issues in India with

the aim of promoting people-centered forms of tourism that are nonexploitative, sustainable, and equitable.

16. Honey, “Tourism,” p. 6.

17. Western, “Ecotourism,” p. 6.

18. Ibid, p. 9.

19. Ibid, p. 6.

20. Ibid, p. 11.

21. Bola Olusola Adeleke, “Peace and Tourism in Nigeria.” Paper commissioned for 2008 Travelers’ Philanthropy

Conference, Arusha, Tanzania. Available from the Center for Responsible Travel (www.responsibletravel.org).

22. U.S. Department of State, “Travel Warning: Nigeria,” December 2, 2008, available at http://travel.state.gov/

travel/cis_pa_tw/tw/tw_928.html (accessed September 6, 2009).

23. Aditi Chanchani, “Tourism in India: Role in Conflict and Peace,” p. 1. Paper commissioned for 2008

Travelers’ Philanthropy Conference, Arusha, Tanzania. Available from the Center for Responsible Travel (www.

responsibletravel.org).

24. Ibid.

25. Ibid, p. 8.

26. UNWTO, Tourism Highlights, p. 1.

27. See Western, “Ecotourism.”of Related Interest

• Blood Oil in the Niger Delta by Judith Asuni (Special Report, August 2009)

• Crisis in the Niger Delta by David R. Smock (USIPeace Briefing, September 2009)

• Beyond Emergency Responses in the Democratic Republic of Congo by Raymond Gilpin, Catherine Morris and Go Funai (USIPeace Briefing, August 2009)

• My Kashmir: Conflict and the Prospects for Enduring Peace (2008) by Wajahat Habibullah

• Promoting Cross-LoC Trade in Kashmir by Moeed Yusuf (Special

Report, August 2009)

• Faith and Politics in Nigeria (2008) by John N. Paden

United States

Institute of Peace

1200 17th Street NW

Washington, DC 20036

www.usip.org

An online edition of this and related

reports can be found on our Web site

(www.usip.org), together with additional

information on the subject.

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Costs

Social Costs

May attract visitors whose lifestyles and ideas conflict with the community's. An example may be the visitors' use of drugs and alcohol.

May change individual behaviour and family relationships.

May lead to an increase in sexually transmitted diseases.

Loss of traditional values and culture through imitation of visitor behaviour or cultural diffusion resulting from normal, everyday interaction.

May create crowding and congestion. May compete with residents for available

services, facilities, and existing recreation opportunities.

May result in harassment of visitors perceived to be wealthy and an increase in crime.

Benefits

Social Benefits

Brings in outside dollars to support community facilities and services that otherwise might not be developed.

Encourages civic involvement and pride. Provides cultural exchange between hosts and

guests. Encourages the preservation and celebration of

local festivals and cultural events. Facilities and infrastructure developed for

tourism can also benefit residents. Encourages the learning of new languages and

skills. Tourism related funds have contributed towards

schools being built in some areas.

 

Can involve violations of human rights. People have been displaced from their land and beaches have been reserved for hotel guests while access is barred to local people.

Environmental Benefits

Fosters conservation and preservation of natural, cultural and historical resources.

Encourages community beautification and revitalization.

Could be considered a clean industry.

Environmental Costs

May threaten specific natural resources such as beaches and coral reefs or historical sites.

May increase litter, noise, and pollution. Brings increased competition for limited

resources such as water and land, resulting in land degradation, loss of wildlife habitats and deterioration of scenery.  Tourism seasonality

Directly contributes to sewage and solid waste pollution.

Emissions generated by forms of transportone of the main environmental problems of tourism.

Economic Benefits

Helps diversify and stabilize the local economy.

Provides governments with extra tax revenueseach year through accommodation and restaurant taxes, airport taxes, sales taxes,park entrance fees, employee income tax etc..

Creates local jobs and business opportunities. These include those jobs directly related to tourism (hotel and tour services) and those that indirectly support tourism (such as food production and housing construction).

The multiplier effect:o Brings new money into the

economy. Tourist money is returned to the local economy as it is spent over and over again.

o Helps attract additional businesses and services to support the tourist industry.

Tourist multiplier effect

Is labour-intensive. Earns valuable foreign exchange.

Economic Costs

Tourism development of infrastructure (airports, roads, etc.) can cost the local government a great deal of money.

May inflate property values and prices of goods and services.

Leakages:o If outside interests own the tourism

development, most of the economic benefits will leave the community.

o Considerable amount of foreign exchange revenues leaks back out of the destination countries for tourism-related imports.

Tourist multiplier effect

Employment tends to be seasonal. Workers may be laid off in the winter season.

Tourism seasonality

Many jobs in the tourism industry are poorly paid. This is a particular problem in LEDCs where the local workforce lack the skills to fill the better paid management positions.

Tourist numbers can be adversely affected by events beyond the control of the destination e.g. terrorism,  economic recession. This is a big problem in LEDC countries dependent on tourism.

Tourism dependency

Tourism follows a "product life cycle", with a final stage of decline, where the destination no longer offers new attractions for the tourist, and the quality has diminished with the rise of competition and tourist saturation.

Tourism life cycle model

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ENVIRONMENTAL IMPACTS OF TOURISMHOW TOURISM CAN CONTRIBUTE TO ENVIRONMENTAL CONSERVATION

The tourism industry can contribute to conservation through:

Financial contributions

Direct financial contributions Tourism can contribute directly to the conservation of sensitive areas and habitat. Revenue from park-entrance fees and similar sources can be allocated specifically to pay for the protection and management of environmentally sensitive areas. Special fees for park operations or conservation activities can be collected from tourists or tour operators.

The tour operator Discovery Initiatives, which is a member of the Tour Operators Initiative for Sustainable Tourism Development, makes an annual financial contribution to the Orangutan Foundation of some US$ 45,000. The money is earned from only 5 tour groups of 10 people each visiting the Tanjing Putting National Park in Central Kalimantan. The park is under huge pressures from deforestation and river pollution from unrestricted gold mining. This money directly funds park staff and rangers, rehabilitation efforts for young orangutans, and the care center. It provides almost the only economic support for saving this park, where the park fees are officially only the equivalent of 12 pence a day.

Contributions to government revenues Some governments collect money in more far-reaching and indirect ways that are not linked to specific parks or conservation areas. User fees, income taxes, taxes on sales or rental of recreation equipment, and license fees for activities such as hunting and fishing can provide governments with the funds needed to manage natural resources. Such funds can be used for overall conservation programs and activities, such as park ranger salaries and park maintenance.

The Seychelles in the Indian Ocean is introducing a US$ 90 tax on travelers entering the Seychelles. Revenue will be used to preserve the environment and improve tourism facilities. (UNEP, report to the CSD, 1999)

In West Virginia (US) a whitewater rafting tax is collected from everyone who participates in a commercial rafting trip. The fee goes toward studying the environmental impacts of rafting. In addition, the rafting companies participate in several river cleanup days each year. (EPA)

In Belize, a US$ 3.75 departure tax goes directly to the Protected Area Conservation Trust, a Belizean fund dedicated to the conservation of the barrier reef and rainforest. (The International Ecotourism Society)

For Costa Rica, for example, tourism represents 72% of national monetary reserves, generates 140,000 jobs and produces 8.4% of the gross domestic product. The country has 25% of its territory classified under some category of conservation management. In 1999, protected areas welcomed 866,083 national and foreign tourists, who generated about US$ 2.5 million in admission fees and payment of services.

Improved environmental management and planning

Sound environmental management of tourism facilities and especially hotels can increase the benefits to natural areas. But this requires careful planning for controlled development, based on analysis of the environmental resources of the area. Planning helps to make choices between conflicting uses, or to find ways to make them compatible. By planning early for tourism development, damaging and expensive mistakes can be prevented, avoiding the gradual deterioration of environmental assets significant to tourism.

Cleaner production techniques can be important tools for planning and operating tourism facilities in a way that minimizes their environmental impacts. For example, green building (using energy-efficient and non-polluting construction materials, sewage systems and energy sources) is an increasingly important way for the tourism industry to decrease its impact on the environment. And because waste treatment and disposal are often major, long-term environmental problems in the tourism industry, pollution prevention and waste minimization techniques are especially important for the tourism industry. A guide to sources of information on cleaner production (free) is available here.

Environmental awareness raising

Tourism has the potential to increase public appreciation of the environment and to spread awareness of environmental problems when it brings people into closer contact with nature and the environment. This confrontation may heighten awareness of the value of nature and lead to environmentally conscious behavior and activities to preserve the environment. For instance, Honduran schoolchildren from the capital city of Tegucigalpa are routinely taken to visit La Tigra cloud forest visitor center, funded in part by eco-tourist dollars, to learn about the intricacies of the rainforest.

If it is to be sustainable in the long run, tourism must incorporate the principles and practices of sustainable consumption. Sustainable consumption includes building consumer demand for products that have been made using cleaner production techniques, and for services - including tourism services - that are provided in a way that minimizes environmental impacts. The tourism industry can play a key role in providing environmental information and raising awareness among tourists of the environmental consequences of their actions. Tourists and tourism-related businesses consume an enormous quantity of goods and services; moving them toward using those that are produced and provided in an environmentally sustainable way, from cradle to grave, could have an enormous positive impact on the planet's environment.

Protection and preservation

Tourism can significantly contribute to environmental protection, conservation and restoration of biological diversity and sustainable use of natural resources. Because of their attractiveness, pristine sites and natural areas are identified as valuable and the need to keep the attraction alive can lead to creation of national parks and wildlife parks.

In Hawaii, new laws and regulations have been enacted to preserve the Hawaiian rainforest and to protect native species. The coral reefs around the islands and the marine life that depend on them for survival are also protected. Hawaii now

has become an international center for research on ecological systems - and the promotion and preservation of the islands' tourism industry was the main motivation for these actions. (Source: Mundus)

Grupo Punta Cana, a resort in the Dominican Republic, offers an example of how luxury tourism development and conservation can be combined. The high-end resort was established with the goal of catering to luxury-class tourists while respecting the natural habitat of Punta Cana. The developers have set aside 10,000 hectares (24,700 acres) of land as a nature reserve and native fruit tree garden. The Punta Cana Nature Reserve includes 11 fresh water springs surrounded by a subtropical forest where many species of unusual Caribbean flora and fauna live in their natural state. Guests can explore a "nature path" leading from the beach through mangroves, lagoons of fresh water springs and dozens of species of Caribbean bird and plant life. The Punta Cana Ecological Foundation has begun reforesting some parts of the reserve that had been stripped of their native mahogany and other trees in the past. Other environmentally protective policies have been put into effect at the resort, such as programs to protect the offshore barrier reefs and the recycling of wastewater for use in irrigating the grounds. The fairways of the resort's new golf course were planted with a hybrid grass that can be irrigated with sea water The grass also requires less than half the usual amounts of fertilizer and pesticides. The resort has also established a biodiversity laboratory run by Cornell University.

Tourism has had a positive effect on wildlife preservation and protection efforts, notably in Africa but also in South America, Asia, Australia, and the South Pacific. Numerous animal and plant species have already become extinct or may become extinct soon. Many countries have therefore established wildlife reserves and enacted strict laws protecting the animals that draw nature-loving tourists. As a result of these measures, several endangered species have begun to thrive again.

In the Great Lakes region of Africa, mountain gorillas, one of the world's most endangered great apes, play a critical ecological, economic and political role. Their habitat lies on the borders of northwestern Rwanda, eastern Democratic Republic of Congo and southwestern Uganda. Despite 10 years of political crisis and civil war in the region, the need for revenue from ape-related tourism has led all sides in the conflict to cooperate in protecting the apes and their habitat.

Establishment of a gorilla tracking permit, which costs US$ 250 plus park fees, means that just three habituated gorilla groups of about 38 individuals in total can generate over US$ 3 million in revenue per year, making each individual worth nearly US$ 90,000 a year to Uganda. Tourism funds have contributed to development at the local, national and regional level. The presence of such a valuable tourism revenue source in the fragile afromontane forests ensures that these critical habitats are protected, thus fulfilling their valuable ecological function including local climate regulation, water catchment,and natural resources for local communities. Source: UNEP Great Apes Survival Project and Discovery Initiatives

Alternative employment

Tourism can provide an alternative to development scenarios that may have greater environmental impacts. The Eco-escuela de Español, a Spanish language school created in 1996 as part of a Conservation International project in the Guatemalan village of San Andres, is an example. The community-owned school, located in the Maya Biosphere Reserve, combines individual language courses with home stay opportunities and community-led eco-tours. It receives around 1,800 tourists yearly, mostly from the US and Europe, and employs almost 100 residents, of whom around 60%

were previously engaged in mostly illegal timber extraction, hunting and milpasmonitoring in 2000 has shown that, among the families benefiting from the business, the majority has significantly reduced hunting practices, and the number and extension of "slash-and-burn" agricultural plots. Furthermore, as most families in the village benefit directly or indirectly from the school, community-managed private reserves have been established, and social pressure against hunting has increased.

Awareness raising and alternative employment: the orangutan viewing centre at Bohorok, IndonesiaObserving wild and semi-wild orangutans in their natural habitat is a significant environmental education opportunity for large numbers of domestic visitors. To enhance this education experience, the existing station at Bohorok, North Sumatra is to be transformed from a rehabilitation center into an orangutan viewing center, thus offering another, crucial contribution to the sustainable conservation of the rainforest ecosystem. By developing ecotourism for orangutan viewing under the new project, all visitors will gain a rewarding personal experience from orangutans, wildlife and the rainforest ecosystem in general. This will increase their awareness of the importance of rainforest conservation. Moreover, tourism will continue to provide a major source of income for the local population, thus promoting sustainable forest utilization as a genuine alternative to timber exploitation and the poaching and trade of wildlife. Source: Sumatran orangutan conservation programme

Regulatory measures

Regulatory measures help offset negative impacts; for instance, controls on the number of tourist activities and movement of visitors within protected areas can limit impacts on the ecosystem and help maintain the integrity and vitality of the site. Such limits can also reduce the negative impacts on resources.

Limits should be established after an in-depth analysis of the maximum sustainable visitor capacity. This strategy is being used in the Galapagos Islands, where the number of ships allowed to cruise this remote archipelago is limited, and only designated islands can be visited, ensuring visitors have little impact on the sensitive environment and animal habitats.