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The impact of tourism on a
ECONOMIC Impact: Advantages
Direct – created directly by the tourists
themselves. (visitor spends $500 in a hotel
directly increases income of hotel by $500)
Indirect – the flow-on effect of the direct
impact. (the $500 flows into the economy
increasing the income of the region by
more than the $500)
Direct and Indirect employment benefits
Direct employment - ie tour guide or
Indirect employment - ie the supplier of
the tour buses to the tour companies or
the provider of uniforms to the hotels
employing the hotel receptionists.
Leakage occurs when some of the monies
earned through tourism ‘leak’ out of the
economy in the form of savings or
$1000 spent in a hotel in Auckland
doesn’t necessarily all stay within the
Auckland economy as some of that will
flow on through wages and taxes, and
some of that may be put aside as savings,
some more may be used to travel
overseas or purchase goods from
The size of the country
The structure and diversity of the national
The nation’s import policy
Whether or not supply can keep pace with
The type of tourism
The class of visitor
The location of development
Sources of leakage
Expenditure on overseas promotion
Imports of materials and equipment
Imports of consumables such as
food and drink
Interest paid on foreign loans
Leakage is expressed as a Multiplier (number).
The lower the number, the less leakage takes
Leakage varies from 56% (small island nations
where much of the tourism dollar is not
retained within the economy as so much needs
to be imported from overseas to serve the
tourism industry) to 11% for more developed
countries which have lower dependency on
imports to meet the needs of tourists.
Changes in any of the factors used in
calculating the Multiplier can change
the result Eg. If more people save or
more people buy goods for overseas
then the Multiplier will increase.
If people switch to buy local goods,
spend more of their income, then the
Multiplier will decrease
Changes to the Multiplier occur:
ECONOMIC Impact: Disadvantages
Over dependence on tourism - money invested in
tourism facilities instead of more fundamental investment
Tourism plant is not transferable - cannot be easily
converted to other uses.
If there is over capacity it cannot easily be switched to
Tourism is a seasonal activity in many
countries/locations with facilities being used extensively
often for less than half the year - wasteful use of
resources as funds invested in infrastructure and
superstructure are not used year round.
Seasonal unemployment - social and economic
Inflationary impact of tourism - social and economic
problems. The high demand for food, clothes and
transport causes price rises causing pressure for local
Demand for land for tourism facilities can lead to a
dramatic increase in land values and building costs.
SOCIAL Impact: Disadvantages
Over dependence on tourism
Separate tourism development
SOCIAL Impact: Advantages
Employment – tourism is a generator of
jobs impacting on a community’s mental
and physical health
Redistribution of wealth –income is
generated in one area and spent in a
Improvement in lifestyles – tourism
brings increase in supply of basic
amenities, attractions and recreational
facilities for residents as well as visitors.
Factors influencing social impact
The number of visitors – the more visitors to an
area, the greater the impact of the tourism.
The length of stay – short stay visitors often do
not fully appreciate or understand local culture
leading to inappropriate behaviour or unintended
Economic characteristics of tourists – the closer
the economic levels between visitors and residents,
the less chance for resentment, envy and anger
among local population.
Social and cultural characteristics of tourists –
the more alike the tourists and local residents are in
terms of social and cultural characteristics, the less
chance there is for social and cultural clashes.
Same factors as social impact:
The number of visitors
The length of stay of the visitors
The economic characteristics of the
The social and cultural characteristics of
The stage of economic development of
The strength of the local culture
and the extent to which it meets
the needs and expectations of
visitors without compromising its
underlying values influences the
extent to which tourism affects
(Lundgren - 1974)
Local culture meeting needs of visitors:
CULTURAL Impact: Negative
Staged authenticity –demand for local culture often
results in the commercialization of culture by
transforming traditional festivals and ceremonies into
staged events performed for the tourist trade.
Breakdown in cultural respect – this
commercialization leads to breakdown in respect
among locals for their own culture.
Airport Art – creation of mass-produced imitations of
local art, introduced to serve the tourist need for
inexpensive ‘trinkets’ to take home as a souvenir.
Environmental bubbles – separate tourism
developments creating islands of tourist development,
alien to the host culture.
Premature modernization and commercialization
– local population forced to adopt new lifestyles and
lose traditional values and techniques.
CULTURAL Impact: Positive
Revival of local customs and traditions – interest
demonstrated by tourists increased local interest in
their own cultural icons
Demand for local products – reviving the interest in
Improvements in self-worth – the creation of
indigenous craft and art has shown increased self-
value and identify.
Employment – for artists, craftspeople, cultural
Preservation of history – tourism can lead to
improved awareness of importance of local history,
and preservation and restoration of historic buildings,
museums, parks and reserves.
Cross cultural empathy - - more likely to occur
when tourist contact is more than a short and
commercial encounter, but does happen.
ENVIRONMENTAL Impact: Negative
Increased levels of pollution – air, water,
Destruction of the natural environment – due
to tourism infrastructure & superstructure
Ecological congestion – leading to erosion and
destruction of habitat
Overloading – of waste disposal and sewerage
Overuse – of water & other resources
Destruction of buildings – being worn away
ENVIRONMENTAL Impact: Positive
Strengthening of conservation and
heritage – restored, revitalized and even
saved from extinction due to tourism
Stimulating the funding of
conservation – helps protect natural
assets, including landscapes, animals and
birds important to tourism
Environmental impact of tourism on N
Queenstown conflict re introduction of Air NZ 737 aircraft,
plus aircraft activity in Aoraki/Mount Cook National Park +
Franz Josef and Fox Glaciers.
Westland – noise created by helicopters causing problems
Concern over the effect that infrastructure and
superstructure has on the NZ landscape
Erosion of tracks eg. Tongariro Crossing and Milford Track
Degredation of natural habitat in Shotover River catchment
Disturbances to wildlife on Otago coastline
Erosion of sand dunes at Cape Reinga
Damage to rocks at Dolomite Point, Punakaiki
Overcrowding in National Parks
Conflict between keeping ‘wilderness’ wild and opening
access to tourism
Issues around ‘equality’ – the rights of residents to enjoy
walking tracks and amenities when volume of tourists may