Tourism in the Modern World - Term Paper Example

Introduction: Despite ongoing economic difficulties worldwide, the tourism industry is profitable around the world. Developing countries are becoming popular destination. Tourism products must be ecological and generate employment for common people in order to serve complete development. In the under developed and poor countries as well, the tourism industry can play a huge part to boost their economy and also ensure social stability. The objective of this paper to analyze how the travel and tourism industry helps the poor, underdeveloped countries to boost and develop the economic condition. The research discusses whether the travel and tourism industry and growth achieve by this sector is a long term solution for the economic problem or it is just a solution for the time being and government needs to find out more robust solution to solve the economic issue. World Tourism Industry: Some fact and Figures In the modern world, travel and tourism sector is one of the key components behind the growth of world economy. In the developed country, developing country and the under developed countries, travel and tourism plays an important role in the growth of the economy. At present, travel and tourism industry has grown-up into a comprehensive economic powerhouse. The joint direct and indirect effects of the travel and tourism industry on the world economy in 2012 were as follows: total revenue generation of US$1.2 trillion; 260 million new jobs for the people across the globe; US$70 billion in investment in the tourism industry and US$1.2 trillion in exports. (Fuller, 2013)Travel and tourism industry is being responsible for 3.2% of the global GDP. (Miesen, 2013)The above mentioned facts and figures represents 9% of the total world economy last year; 1 out of every 11 new jobs created globally is in the travel and tourism sector; 5% of the total economic investment and 5% of total exports.  In the year 2012, the number of total tourist across the globe exceeded 1 billion for the first time in history and among all the countries across the globe, “China became the world’s largest spender in international tourism by spending US$102 billion, surpassing Germany and the US”. (Fuller, 2013). The report also suggested the fact that the contribution of the travel and tourism industry in world GDP for the next 10 year will grow drastically and projection is it will grow 4.4% annually. (Fuller, 2013). Why Tourism? Tourism – an Economic and Social Phenomenon: Over the decades, tourism has qualified as a tool for growth for almost all the countries across the globe. With the growing ‎diversification it is now one of the fastest growing economic subdivisions in the world. ‎Modern tourism is diligently linked to development and incorporates growing quantity ‎of new destinations. The ever changing dynamics have turned tourism into a “key driver for socio-‎economic progress” (UNWTO, n.d.). ‎At present the business size of tourism matches or even exceeds that of oil exports, ‎food yields or automobiles sectors in the world. Some key facts associated with the tourism industry are as follows: International tourist appearances grew by 5% in 2013 to 1.087 billion; in the year 2012, international tourism produced US$ 1.3 trillion in export incomes and UNWTO forecasts a growth in international tourist arrivals of between 4% and 4.5% in 2014. (UNWTO, n.d.) To ensure tourism as the backbone of the economy of the poor countries, the government of those countries must consider the local people and their problem first. To promote the tourism in the poor countries government must solve the problems of the people there. They must ask the transnational companies to ensure development not only the resort place for the tourist but also for the local people by developing more job, providing other support and most importantly the social security to the common men. It will be valuable to defend the culture, life and environment and this also effects in benefits for the tourists as well. Roger (1991) in his review mentioned the travel and tourism industry as a promising one along with passport to development. Generally in the poor and under developed countries tourism brings airports, better roads, hotels, transport, and power supplies which openly relate to development of the country as well as for the people of the nation. It creates job for the people.(Roger, 1991, pp. 227-230)The report published in the Merco Press (2010) shown the fact that during the time of economic crisis all over the globe the volume of employment in the travel and tourism industry in the year2008-2009 increased by about 1%. The report also mentioned the fact that “While the Americas suffered a 1.7% decrease in employment, employment in Asia and the Pacific region remained resilient and gained 4.6%.” (Merco Press, 2010). These facts are clear indication that travel and tourism can support the employment in the underdeveloped countries. Lea (1998) in his review also mentioned that tourism not only boost economy , creates jobs but also protect the culture of the society and represent the same in front of the world. The original arts and crafts develop more and become more efficient to amuse tourists, and at the same time there are more requests for the protection of their unique culture and nature as a valuable commodity for the people of other nations. Alongside the economic boost, development of the tourism industry is a good way to preserve the local culture as well. (Lea, 1998, pp. 1-4) Some Research and findings related to Tourism and Economic Growth: From the case study of Sequeira & Nunes (2008) it is very clear that countries which are giving more importance to the tourism sector grow much faster compare to others. Likewise, their study also proves the fact that performance of tourism industry and its relation with the economy is not related to the common fact of high tech and large scale industry –economic development factor. In their analysis they have consider 2 factors: one is the growth of tourism helps the country to increase the demand of non-tradable goods and the second factor is tourism is directly related to renewable resources of the nation such as mountains, river, etc. In their analysis they have mentioned that tourism industry is directly affecting the GDP and exports of the nation. In order to show the impact of the tourism on the poor and under developed nations, Sequeira & Nunes used 3 different variables namely tourist arrival as population proportion; tourism receipts in terms of percentage of exports; and finally tourism receipts in terms of percentage of GDP. ( Sequeira & Nunes, 2008, pp. 2433-2434) apart from the above 3 parameters, to understand the effect of tourism they have also considered factors like black market premium, investment-output ratio, government consumption-output ratio, education rate and life expectancy of various poor , underdeveloped and developing countries to understand the impact of tourism. (Sequeira &Nunes ;2008, p. 2434) After analyzing all these factors they have found that tourism as an industry has very insignificant impact on the education system and life expectancy in any of the poor countries. The analysis also reveals the fact that tourism as an industry has a significant impact in the long run of economic growth. From that data analysis they have figured out that 1% increase in the proportion of tourism returns on GDP is responsible for 0.03% -0.05% increase in the growth rate. 1% increases in the number of tourist coming also effects 0.1% economic growth. (Sequeira & Nunes, 2008, p. 2435) Another key fact they have found from the survey is that, in case of poor and under developed nations, number of tourist arrival as proportion to the population has a strong impact on the economy of the poor and underdeveloped countries. From the research it has been proved that if the poor and under developed countries focus more on the tourism then their economic growth can be independent of black market premium and government expenses. (Sequeira &Nunes ,2008, p. 2437) A recent study by Schubert, Brida, and Risso (2011) mentioned the fact that economy of a lesser tourism-driven country increased along with the growth rate of international tourism demand. To prove this fact they have used the annual tourist data Antigua and Barbuda from 1970 to 2008. It shows that an upsurge in the development of tourism request hints to intermediate dynamics with progressively growing economic growth and accumulative terms of trade. (Schubert, Brida, and Risso, 2011, p. 377) A study by Kreishan (2010) scrutinizes the causality relationships between tourism incomes and economic growth for Jordan by analyzing the annual data for the period 1970-2009. His analysis showed that there is a positive relationship between travel and tourism industry development and economic development in the long run for Jordon. (Kreishan , 2010, p. 229) Likewise, Katircioglu (2009) also reveals the fact that there is a long run equipoise relationship between three factors namely tourism, trade and real income growth. He analyze based on data of Cyprus and pointed out the fact that a long-run equilibrium connection can be concluded between these three variables and real income growth increased the overall earning of the nation with the increase of imports and exports as well as with the arrival of international tourists. (Katircioglu, 2009) How Tourism Helps Any Less developed economy to grow? – Example of China China is the most common example for all to see that how a nation can use the travel and tourism industry to grow their economy. During the early phase, between 1949 to 1966, tourism was only a form of distinct political activity as handful of travel agents only used to assists the foreigners who get special permission to visit there and the other Chinese people who visit China from other parts of the world. During 1966-1978 there was an absolute standstill in this industry as only 303 visitors visited the country in 1966 (Sun, 1992). From 1978 the situation started to change as the government began to consider tourism as an economic activity with the main function of earning the country's badly needed foreign exchange. (Zhang, Pine & Hanqin, 2000, p.282). From 1986, they started to consider this as one of the foremost pillar industries in their economy (He; 1999). The CPC Central Committee of China in their conference in the year of 1998 identified the “tourist industry as one of the new growth points of the national economy in the years to come” (Qian, 1999). All these led to a drastic change in the economy of China. The approach of the government towards the tourism industry makes it one of the top 10 destinations of the world. “With 24 million international arrivals with overnight stay, China ranked the world's sixth, accounting for 3.85 per cent of the world's total. With international revenue from tourism of over US$12.5 billion, China ranked seventh, accounting for 2.8 per cent of the world's total.” (Zhang, Pine & Hanqin; 2000; p. 284) Not only the economy, the growth in the tourism industry also makes the “portion of long-haul markets such as Europe and North America has been shrinking, while that of the short-haul markets such as Asia and other neighboring countries and regions has been expanding greatly” (Zhang, Pine & Hanqin, 2000, p. 285). For example, during 1980-1996 the market share of Europe and America has dropped from 43.7 %to 36.2%, as the market share of Asia grow from 41.7% to 60.3%, and this change was largely due to growth in the tourism industry of China. As a matter of fact, the growth in the travel and tourism industry gives China opportunities like: increase their potential in the international market and also among the international visitors; steady growth in the economy, providing unique attraction and advanced facilities for the people in and outside of the nation, growth in the underdeveloped areas; generating more jobs, more foreign currency earning, and overall growth for socio-cultural sector in the nation. How Tourism can help the Economy of under developed countries: All over the world, tourism industry is playing a key part to support the less developed countries to boost their economy. There are various examples that clearly suggest that it is a key behind making any country’s economy a healthy and stable one specially the poor and under developed nations. The Third World countries inspire tourism development for their economic progression (Hall, 1995). The poor nations improve their towns and areas by the tourism industry. Governments consider tourism as an instrument for infrastructure expansion, enhance job chances, earning foreign exchange, and also for regional development and making benefits for local communities (Glasson et al., 1995). Tourism development can add to persons’ proceeds and revenues for host nations (Shafer. et al., 2002). Malaysia In Malaysia, travel and tourism industry is the key for income generation, employment opportunity and foreign exchange earnings. Bhuiyan et al. (2011) in his analysis mentioned the fact that Malaysia as a nation used the travel and tourism sector most effectively as it is contributing over 40% of country’s total balance of payments and foreign exchange earning sector. (Bhuiyan et al., 2011, p. 1333) With the changing economic condition of the world the government of Malaysia started to focus on this sector from the middle of 1980s. Another key reason was decrease in petroleum assets which till that point was the key earning factor for the nation. (Fateh et al., 2009, p. 207) With the constant support from the government and with the help if well thought out plans, Malaysia has captured 2% of global market share of inbound tourism receipt in 2008. This industry employs 1.7 million workers or approximately 16% of total employment in 2008. (Bhuiyan et.al., 2013, p. 11) Tourism in Rwanda: In this country, tourism is now the largest foreign-exchange earner. The bulk of income comes from rich safari tourists in Kenya and Tanzania who always enjoy spending 2-3 days in this area to see Rwanda's famous mountain gorillas. To promote the tourism, travel agencies are now trying to incorporate more tourist spot to earn more money and also to ensure more job opportunity for the local people. (Ruxin, 2010) Likewise, a few years back Mayange was not a pleasant tourist spot for the visitors. Like all other less developed parts of the world, in this sector also the infant mortality rate was very high, the health center was hardly open, and there was no smooth communication link present. Among other problems there was negligible farming activity, no electricity, and most importantly the level of education and job opportunity was also very low. In a nutshell-the basic components of a stable economy was not at place. But the scene change drastically as the Government of Rwanda launched the “Millennium Villages Project”, with the people of this place to promote the tourism. At present, “Mayange is thriving to such a degree that land prices in the community have more than tripled. Food is abundant, business is springing up, schools are dramatically improved, and mortality rates have dropped substantially”. (Ruxin, 2010) Tourism in Solomon Island: Solomon Island is considered as one of the least developing countries (LDCs) in the world. But due to severe reduction of the rain forests, along with soil destruction and degradations, deforestation, and possible over fishing- government of this place now has to consider some other alternative source to support their economy. The surveys conducted by several organizations have proven the fact that “tourism can make valuable contributions to the economic growth of a country. There are great options of adventure and relaxation that could help Solomon Islands’ economy grow in a sustainable and eco-friendly way (Namosuaia, 2010). Namosuaia (2010) in his report mentioned the fact that tourism industry in the Solomon Island made up 7.4% of total GDP which is $48.7 million in value. Not only that, tourism industry also responsible for 6.1 percent of employment of the country and 5.9 % or total export which is $18 million in values. The prediction make by the government is also proving the fact that Solomon Island can consider tourism as a major component for their economic stability. In the next 10 years, “tourism industry in the country is expected to grow to account for 8.4 percent the GDP, $ 98.7 million in value, 9.6 percent for employment, and 8.1 percent $ of total exports which is 36.9 million in absolute term.” (Namosuaia, 2010) Eco Tourism and Economy of Underdeveloped Countries: “Tourism might not be the ultimate answer to poverty and economic woes, but it is a major boon for places around the world that suffer from a lack of natural resources or industry.” (Lew, 2011). The growth associated with the eco-tourism industry depends on reasonableness as much as it does on the determination to preserve the environment. At the very end, achievement will not only be dignified by the properties of forest saved, but also by the quantity of money received and the number of jobs formed from the expansion of eco –tourism in the countries which have poor economic structure. . Eco Tourism in Dominica: Dominica has turned to eco-tourism as it does not have the geography that makes other Caribbean islands so popular among tourists across the globe. To promote the eco- tourism, “it has never developed a mainstream resort industry. Proclaiming itself the Nature Island, Dominica has instead advertised its natural, undeveloped beauty.” (Lew, 2011) In order to boost the economy and create more jobs the necessity of safeguarding/ security has been encouraged in Dominica. Local guides are used to help the tourists as well as protect the nature which not only creates more jobs but also attract tourist. But now to develop the economy Dominica needs to maintain the balance between development and conservation. Eco-Tourism in Botswana: Botswana is one of the comparatively wealthy nations among the poor underdeveloped South African countries. Their economic stability has been originated from their strategic use of eco-tourism. “The backbone of this would-be tourism boom is nature-viewing safaris to places like Chobe National Park, the Okavango Delta and the vast Kalahari Desert. These uninhabited, wildlife-filled lands are considered to be among the last few untouched and truly natural places on the continent.” (Lew, 2011) To boost the economy Botswana government has adopted good thinking policies to focus on the tourism growth and on environmental protection. To protect the nature they never allow much high number of tourist at places like Okavango Delta and Chobe National Park, which therefore helping them to protect the nature. But the high charge increases the country's overall GDP. Lew (2011) in his review mentioned that “high-cost/low-volume approach might not sit well with nature enthusiasts who want to visit the pristine wilds of Botswana on a budget, but the approach has kept tourist numbers down while keeping profits at an acceptable level and it is not necessary to work everywhere.” (Lew, 2011) Conclusion: The above analysis of various poor nations alongside development China with the help of travel and tourism make it very clear that for the poor and underdeveloped nations, travel and tourism industry can be act as a way out. It is not a short term solution of the economic problem as the story of China clearly proves that tourism industry is a long term growth option for any nation. In addition one must consider the fact that with the development of the travel and tourism industry any nation can face some difficulties such as increasing competition from in and outside the country, sharp contradiction among the mature travelers and pre mature market mechanism, impact of overall economic slowdown, policies and strategy complication etc. To resolve this every nation need to maintain co relation between the theory and practices, must give importance to local culture and heritage and develop tourism based on that, ensure the fact that the sentiments of local people is not getting hurt and the common people of the country are getting the maximum benefit of this development. All these can ensure a long term steady growth for the poor and developing nations. References Bhuiyan, Μ. A. H. et. al.; (2013); Tourism Development in Malaysia from the Perspective of Development Plans; Asian Social science; 9(9); pp. 11-18 Bhuiyan, Μ. A. 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