Critical and Contemporary Themes in Tourism - Research Paper Example

 It is impossible to achieve both visitor and community satisfaction in urban destinations It’s impossible to achieve both visitor and community satisfaction in urban tourist destinations due to the following factors. Overcrowding Strain on the national resources(water and housing) Cost of living Culture clash and more Many countries in the world have been promoting tourism and travel mainly due to the fact that it provides a much needed source of revenue to the national coffers and boosts the trade balance in the balance of payments of the country concerned. However, little attention has been paid to the fact that such over enthusiasm for tourism promotion doesn’t take into account such nationally important problems as mentioned above. This paper just focuses attention on these facts. Overcrowding Urban tourism not only causes overcrowding of places but also leads to some health problems as well. Overcrowding of such popular tourist destinations like London, Paris and Swiss cities has been subject to debate over the years both in the print and the electronic media. Despite a huge propaganda campaign to the contrary by some authorities concerned that there is no such problem citizens of these geographical regions have acknowledged the fact that there is really a problem of great magnitude. The influx of tourists to these urban destinations has been on the rise during the current decade. According to researchers even though the current global economic downturn has had a negative impact on global tourism and travel, the impact has been severely felt in some not-so-popular regions while those popular tourist destinations like London and Los Angeles have been receiving more and more tourists on a day-to-day basis (Stephan, 1990). This paper would place greater emphasis on the supply side problem associated with urban housing problem in the UK. While supply constraints have been responsible largely for the current housing problems in the UK urban sector, some exogenous variables like large scale immigration from the Eastern European countries after the EU enlargement have also contributed in a sizeable measure to them. For instance potential job-seekers from the three first tier countries – Poland, Bulgaria and Romania – have been attracted to prospering urban centers in the UK, including London. Their demand for new houses has driven house prices and rents up thus causing an unprecedented trend in the housing market (O'Connell,2002). The following diagram illustrates the fact that the average rent in London divided into five areas depending on the relative price differentials has been rising considerably fast. The net result is higher house prices and rents caused by falling supply and rising demand. As the diagram illustrates, the supply curve shifts on to the left, thus causing a shortage in supply. The demand curve is assumed to be normal while supply is assumed to be inelastic because in order to bring forth new amount of housing a number of months will be required. Figure1:Demand for and Supply of free market housing in selected London locations Price(Rentt) S2 (2008/09) £1450 £1183 The supply constraints can be attributed to five endogenous and exogenous variables, Rising real interest rates The current global economic downturn and financial crisis Falling profit margins The government’s efforts to control inflation Rising land prices Profit margins of housing suppliers have been falling both in nominal and real terms. The recent subprime mortgage crisis has led house suppliers to exercise extra precaution. Defaulting buyers have sought to go for secondary mortgages with a view to minimizing instalment payments (Vries & Boelhouwer, 2005. pp. 80 – 96). However such efforts have been frustrated by the current economic crisis. In the first instance mortgage lenders like commercial banks have been adopting much stricter lending policies. Coupled with equally strict renegotiation terms and conditions house buyers have been discouraged. Next the government efforts to control inflation have brought about a tight monetary and fiscal policy mixture. For example successive British governments have sought to restrict money supply with marked emphasis on sectoral expenditure patterns. Housing comes under governments’ scrutiny very often. Finally rising land prices in urban centers like London have had a negative impact on supply (Salins, 1987). Private house builders have been forced to make alternate investments in other spheres such as building shopping complexes and multiplexes. Table 1: Average Monthly Rent in London - 2009 Studio 1 Bed 2 Bed 3 Bed Area 1 £1331 £1779 £2604 £4165 Area 2 £863 £1122 £1532 £1994 Area 3 £669 £881 £1183 £1450 Area 4 £615 £780 £1028 £1185 Area 5 £574 £719 £884 £1038 Source: www.net-lettings.co.uk The above table illustrates the fact that in selected London areas according to their importance monthly rents have been rising in comparison to the past few years (Thomas, 1996. pp.38-52). In fact over a period of one decade rents have risen by more than 300% in some areas. The supply factors discussed above can be made use of to explain the modern developments in urban areas of the UK. For example government decisions concerning housing boil down to its urban housing policy. Congestion and trend control measures apart, successive British government have been concerned about the extension of urban centers. Negative consequences associated with conurbations like greater London cannot be ignored in the long run. Scrolling urban cities in the UK have produced a mixture of problems. Housing is one of them. Inadequate funds at building societies and falling returns on housing related investments are the two main problems faced by suppliers in trying to keep their asset values at a steadily rising rate. The former problem has effectively reduced the amount of competition led price moderation in the housing market. (Evans,2004) Building societies have been known for their positive contribution to the growth of the housing industry in urban areas of the UK. However now they are much less visible in urban centers. Net returns on investments in the UK housing sector have been falling substantially during the past few years. The subprime mortgage crisis has been responsible for most of these problems though a number of other variables also have impacted on the supply side of housing the urban centers in the UK such as the above mentioned supply constraints and the influx of immigrants from Eastern Europe (Norwood, 2009. pp.58). Strain on the national resources (water and housing) Medway, which is located 30 miles East of London and 40 miles North West of Dover, is one of the largest conurbations in the South east region of London. So, a considerable number of people from Medway travel to London for work. Recently an increasing number of visitors to the area have been noticed. As a result of the retail parks the commercial infrastructure of the area would develop. This would mean domestic airports, railway stations, bus terminals, offices would come up in the area. As a result more people would come and settle down in the Medway town council area. This has resulted in the higher demand for land and property. As a result the value of land and property has increased. Recent advances in transport such as improved train services have tempted more people to come and reside in Medway area since getting to offices in the commercial capital of London is easy. So, people who rent property in Medway now have less cost in terms of time and unchanged cost in terms of money. Hence, compared to a previous situation where they spent more time getting from Medway to London, they are better off. However the Medway community isn’t so happy about the outcomes. The house prices in Medway are rising much faster. So, in the context of the residential/travel trade-off theory, the effect on Medway’s housing market will be positive. With more disposable real income in their hand (taken that Medway prices have not increased as a result of the trade bonuses or the high speed train), people will look for more houses in Medway. Similarly there has been a greater strain on water resources in the area. Though the existing water pipe lines were adequate in the past, they are bearing the brunt of it all, right now. Since brown fields cover 4.7 percent of Medway’s land and is located mainly along the side of the Medway River they can be economically utilized. However brown field sites such as Rochester Riverside show high level of hazardous substances. Medway Waterfront development is responsible for regeneration and development of the brown field sites to make them worthy for building houses. These sites require ground remediation, flood protection and infrastructure for integrating it into mainstream house building. The net result is a snowballing conflict between the community and visitors (Vliet, 1996). Further the serenity of the sub-urban country side of Medway could be lost due to the setting up of a proposed retail park. These negative spill-over effects would more likely lead to opposition from the peace loving local communities. Preserving the country side should be of high priority. Due to the increase of traffic and the development of commercial infrastructure such as airports and offices there would be sound and air pollution. The Medway council would have to think of a way of disposing waste products from the retail park. These waste products could flow to the rivers and canals in the vicinity thus giving rise to water pollution. Certain species of birds and animals endemic to this area could be driven away as a result of acquiring land to set up the retail park. This could lead to protests from environmentalists (Buitelaar, 2007). One of the major economic effects of these new developments would be on the local water supply network in Medway. The first major issue of an out-of-town retail development is the loss of business by the local shopkeepers. Acquiring of land and the demolition of existing buildings would mean that the Medway council would have to pay compensation to the property owners and relocate them. The Medway council would have to bear this cost. Money will have to borrow from banks at high interest rates for this purpose. In order to have ample parking space, a large area of land would have to be rented. This will cost a considerable amount. Greater demand for residences means more lands would have to be utilized for building purposes. As a result REITs could get involved in helping renovate these buildings and building a housing complex. Brownfield sites already have the commodities of living such as water and gas pipes. The existing road networks and railways could be renovated, rather than having to acquire land and build new roads and railways. Acquiring land would mean that compensation would have to be paid to the residents and relocated elsewhere. This would cost a considerable sum of money that would have to be borrowed from banks (Gibb, 2003). Every building reused means one less new building having to be build. That means rural areas of Medway can be more effectively preserved, providing fresh air, open space, water and quality of life for everyone, and their natural eco-systems would be preserved. In spite of these advantages of using brown field sites, a problem that builders have mentioned is that brown field sites are not available in an amount that will make housing affordable for the growing demand. Cost of living In July of 2001, when Beijing was awarded the 2008 Summer Olympic Games most of the general public felt that such an event would bring considerable economic pluses to the host city not just for the duration of the Games, but for a long time to come. But what precise are these economic impacts, and how do they affect the quality of life of local residents? The significance of studies such as these to the Beijing games depends to a certain extent on the similarity of the economic conditions in China to previous hosts. It seems rational that a less developed country would have more advantages from long term growth possibilities (Vuchic, 2005). The argument in favour of sponsoring such events is cantered on the increase in tourism. Even though this is a short term effect but will help increase spending in the economy. It came about because of the athletes, spectators and media who travelled to Beijing. It is considered that the Olympics will also provide a long term boost in repeat tourism; this could be quite important for China as the tourist industry is mainly underdeveloped. It also increased investment in infrastructure. That is to set up the economy for the Olympics, the Chinese authorities have attempted to enhance infrastructure and transport links. These will have some effect in increasing the productive capacity. Clark has identified a number of benefits with such mega sports events. He has said that there are those primary benefits such as attracting a big number of people, rise in investment or trade, private and public partnerships, event related growth in the urban destination such as sectoral and business growth strategies in the city or nation and environment related impacts that can be seen in built and natural environments of the country. He also identified some secondary benefits – a series of positive and negative changes in the macro-economy of the country such as an increase in aggregate demand and supply (Clark, 2008). The macro economic effects of the Olympics would be higher economic growth. The increase in spending related to the Olympics will help to boost Aggregate Demand and economic growth. However, the increased spending will only represent a comparatively small % of GDP. Some estimates say around 0.5% of GDP. Also the Chinese economy is already growing very fast so it is uncertain if a further boost will help. The extra spending could bring about inflation, which has already become a problem in the Chinese economy. The Olympics would certainly result in some localized inflation. The arrival of tourists could put more upward pressure on the Chinese Yuan. The government has been attempting to keep the exchange rate down, but the influx of foreign visitors will only cause further increases in demand (Blake, 2005). The investment in the Olympic facilities themselves and the additional infrastructure, especially accommodation and transport, bring economic benefits in the lead up to the Games. The publicity associated with bidding for, winning and hosting the Games by any country also attracts new investors. Longer-term economic impacts are many. For example community benefits such as local volunteerism, job creation and training, youth and education programmes, funding for community economic development projects and cultural programmes; the popularity and recognition of the host city would increase as a result of extensive media coverage; housing impacts; new investment in the city and region by companies; regeneration impacts and infrastructure and communication benefits. But nevertheless inflation was rising much faster in Beijing during this period (Stephan,1989). Cultural clashes Above all different cultures in the urban areas where tourists visit could lead to clashes and conflicts. For instance, in Italy, Spain and France foreign visitors to urban cities are increasing during the winter season of the year. However many such visitors have found out that they are not welcome simply because their cultures are different from those of the communities. Italian and Spanish authorities have in fact gone on record for suggesting alternative remedies to overcome the negative impact of tourism in the urban centers. Conclusion It’s both possible and impossible for tourists and the local population to be satisfied about the outcomes directly and indirectly related to tourism in urban areas of the country. The negative impacts of overcrowding urban cities like London and Paris by tourists have been cited in mass media often but at the same time are positive impact as well. For example they spend a lot of money thus boosting the local economy. Similarly they can act as a constraint on local resources. Yet again resource mobility in the local economy can be enhanced when tourists are accommodated. Their impact on the cost of living is bound to be negative though at the same time their presence would increase the capacities of the local economy thus increasing the purchasing power of the local communities. Finally there can be culture clash between the two. But nevertheless there are very examples of culture enrichment as in smaller Swiss enclaves. REFERENCES 1. Blake, A., 2005, Economic Impact of the Olympics, University of Nottingham, Nottingham. 2. Buitelaar, E., 2007, The Cost of Land Use Decisions: Applying Transaction Cost Economics to Planning and Development: Real Estate Issues, Wiley-Blackwell, Oxford. 3. Clark, G., 2008, Local Development Benefits from Staging Global Events, OECD, Massachusetts. 4. Evans, A., 2004, Economics and Land Use Planning, Wiley-Blackwell, Oxford. 5. Gibb, K., 2003, Transferring Glasgow's council housing: financial, urban and housing policy implications, European Journal of Housing Policy, vol. 3, no. 4, p. 89 – 114. 6. Norwood, G., 2009, The Housing Downturn: Picking up the Pieces: - A Guide for Estate Agents and Developers, Estates Gazette. 7. O'Connell, G.E., 2002, Problems with the US program approach to urban housing: can Europe lead America to a policy solution in 2002 and beyond?, European Journal of Housing Policy, vol. 2, no. 3, p. 293-307. 8. Salins,P., 1987, Housing America's Poor: Urban and Regional Policy and Development Studies, University of North Carolina Press Enduring, USA. 9. Stephan, B., 1989, Retail parks: Teething troubles or generation gap?, International Journal of Distribution Mnagement,vol,17, no.5, p.24-27. 10. Stephan, B., 1990, The Retail Park: Customer Usage and Perceptions of a Retailing Innovation, The Service Industrial Journal, vol.10, no.2, p.364-376. 11. Thomas, R.G., 1996, Indemnities for long-term price risk in the UK housing market, 12. Journal of Property Finance, vol. 7, no. 3, p. 38 - 52Top of Form . 12. Vliet, W.V., 1996, Affordable Housing and Urban Redevelopment in the United States: Learning from Failure and Success : Urban Affairs Annual Reviews, Sage Publications, California. Top of Form 13. Vries, P.D., & Boelhouwer, P., 2005, Local house price developments and housing supply, Property Management, vol. 23, no. 2, p. 80 – 96. 14. Vuchic, V., 2005, Urban Transit: Operations, Planning and Economics, John Wiley & Sons, New Jersey. 15. UK housing rent statistics, retrieved from www.net-lettings.co.uk on November, 4 2010. Read More