Module 4 Flashcards
cannot be over-emphasized.
Tourism on the economy
one of the very few industries that have identified as a….
cornerstone of the Philippine economy
] declares “tourism as an indispensable element of the national economy and an
industry of national interest and importance, which must be hamessed as an engine of socio-economic growth and
cultural affirmation to generate investment, foreign exchange and employment…”
Section 2 of Republic Act 9593, also known as Tourism Act 2009
Section 2 of Republic Act 9593
Tourism Act 2009
According to the …. tourism contributes to the
economy along three “pathways.”
United Kingdom’s Overseas Development Institute (2007)
(WTTC)
World Travel and Tourism
Council (WTTC)
produce induced effects.
travel and tourism
tourists spend for such commodities as accommodation, transportation, entertainment, and attractions.
direct effects
– refer to spending by international tourist in a country. Spending is considered as export
Visitor exports
- could be farms for food products, utility companies for water and electricity, and schools for human resource needs.
Non-tourism suppliers
collective spending by direct and indirect employees on food and beverage, recreation, clothing housing, and household goods.
Induced effects
- longer-term macro-level effects, such as general enhancement of skills within the economy, provision of better social services (health, education, security), and infrastructure (roads, airports, Internet).
Dynamic effects
terms of formal-sector jobs can range from 10% to 80% of income of poor people.
direct effects
formal-sector jobs can range
10% to 80%
biggest where the linkages are strongest, such as in big, rich, diversified economies.
indirect effects
Hummel in ODI (2007) outlined key findings from Value- Chain Analysis study:
- Revenues of semi-skilled and un-skilled workers constitute 27% of total tourist expenditure.
- Up to half of earnings of the poor come from the food supply chain.
- Income from craft is important for minority groups.
- Aside from the supply chain, most benefits from tourism are concentrated around capital cities, such as Luang Prabang, Laos, the area of his study.
author of entrepreneurship laws in the Philippines.
Senator Bam Aquino
speaking at a youth entrepreneurship convention at San Sebastian College Manila on September 17, 2015
Senator Bam Aquino
- tiny island of Boracay generates
50%
the raw materials needed by the establishments
5%
number of times tourism income is re-spent across sectors within the local economy.
Multiplier effect
- The higher the multiplier, the bigger the impact on the local economy.
Multiplier effect
50% to 90% in small, poor countries
Indirect effects
infrastructure can stimulate non-tourist growth and redistribution to “yellow brick road to export diversification.
dynamic effects
- Value added tax and income tax paid by business owners
dynamic effects
job creation, livelihood generation, tax revenues, and economic regeneration.
Swarbrooke (1999)
POSITIVE IMPACTS OF TOURISM ON THE ECONOMY
- Jobs
- Livelihood Generation
- Hometown’s Share of Tourism Income
- Taxes and Fees
NEGATIVE IMPACTS OF TOURISM ON THE ECONOMY
- Leakage
- Poor Quality of Jobs
- Overdependence
- Opportunity Cost
most optimistic estimate being one job created
Jobs
generated throughout the tourism value chain
employment
suppliers of needed inputs for tourism operations
- value chain
Tourism provides economic opportunities for other industries.
- Livelihood Generation
-venture into agritourism, offering farm-related
experiences to tourists. - (farmers, fishermen, weavers, local bakeries)
Farming communities (Livelihood Generation)
popular pasalubong is seafood, fish vendors
- Puerto Princesa City
tattoo artists, friendship band makers, and women who do pedicure and manicure, and even massage by the beach.
- Puerto Galera in Mindoro
found out that micro-enterprises, homestead farmers, and sole traders have all benefitted
- tourism supply chain
found that bicycle tourism in Europe
European Parliament
bicycle tourism in europe generated in revenues
$57 billion
bicycle tourism trips taken on EuroVelo routes
2.295 billion
tourists’ places of origin and transit routes,
Hometown’s Share of Tourism Income
not restricted to the destination alone
- Tourism’s economic impact
- government also collects value added tax from tourism-related business establishments, business permit fees. NSO, certificates req. for securing passport
taxes and fees
accustomed to consuming or using. cannot be sourced locally. (cheeses, kiwi, wagyu) low wages, unpaid overtime, and seasonality
Leakage
leaked outside of the province.
95%
Tourism creates jobs
Pro Quality Jobs
- tourist ratio has been put as high as
1:1
how many workers in the tourism industry?
4.8 million
causing a shift from livelihood activities to tourism, over time. dependent on tourism
Overdependence
requires billions of pesos for infrastructure alone, such as airports, roads, and terminals.
Opportunity Cost
factor is women agency.
Messerli (2011)
economic diversification, the strength of backward and forward linkages, seasonality, and quality of human resources.
Messerli (2011)
dependent on how much money is retained
multiplier effect
. provide such inputs, compared to one in which is underdeveloped inputs for tourism operations can be procured
retention
- highly developed economies will have higher multiplier effects
well-diversified economy
will lose much of the initial income through leakages. bought from outside the host economy
undeveloped economy
small multiplier effect
retained income
- dictated by climate, wind.
Seasonality
