Effects Of Tourism On Economic Growth: Positive And Negative Impacts

Positive Economic Impacts of Tourism

Discuss about the Effects of Tourism on Economic Growth.

Tourism is one of the sectors that affect a country’s economy, socio-cultural, and environmental scenario deeply. It has both positive and negative effects of these three attributes. There are many countries, which build its economy based on the positivity this sector. Tourism has the power to create various jobs and employment opportunities in a country. The benefits of tourism pass on to the other sectors of a country, which help in overall development. This is the reason many developing countries are presently making changes in their tourism sector and taking policy measures that help the tourism sector play a part in the country’s economic and socio cultural environment. The purpose of this essay is to assess the various negative and positive effects of tourism on the host community and check whether the positive impacts outweighs the negative impacts and to what extent. For showing the impacts, Australia and Singapore, two countries from the Pacific Asia region have been chosen.

The positive economic impacts on a country states that it is benefited by the tourism sector as it created more direct and indirect jobs. It reduces unemployment rate in the economy. Small-scale business industries, which are related to the tourism sector, also flourish. It also helps the governments to increase tax revenue.  For example, tourism in Australia has presented 3 percent of the Gross Domestic Product of the country in financial year 2014-15. This sector contributed $47.5 billion Australian dollar to the country’s national income (Forsyth et al. 2014). As stated by Ghalia and Fidrmuc (2015), the negative impact of tourism on the other hand incorporates increasing expenditure burden on the government. The government has to use its resources in the tourism sector even though the opportunity cost may be high for investing in this sector. Other sectors, which require more resources, are overlooked due to the urgency of resources in tourism. The jobs created by the tourism department are mostly seasonal and sometimes underpaid. According to Meng (2014), this way, the economy losses more than it actually gains. It also generates disguised unemployment in the economy. For example, Singapore a small country has problem of land allocation. The tourism has caused overcrowding in the country. As stated by Chang (2016), tourist shops and accommodations in the country took a huge percentage of the available land, which could be used in other sectors with less opportunity cost. It increases inefficiency in resource allocation of the economy.

Negative Economic Impacts of Tourism

The tourism also affects the socio-cultural aspects of a country. The positive socio-cultural impacts are discussed first. The improvements of the country’s infrastructure done by the government to support tourism, benefits the local communities. The local community members also enjoy the leisure amenities created for the tourists. Preservation of traditional customs and cultures is encouraged by tourism. Local cultures, their traditional handicrafts and other small-scale industry products get a larger market due to tourism. The interchanges between the host community and tourists creates a better understanding of the cultures and increases global awareness of several issues like poverty, abuse of human rights, and others. For example, the indigenous people of Australia get a better recognition due to tourism. The inhumane attitude towards the aborigines from the mainlanders reduced due to the involvement of the government as it came to notice by the international tourists.

There are also negative socio-cultural effects of tourism like bad behaviour by the tourists towards the people of local community. It will create hatred among different cultures and races and hampers the quality of life in the host community. New menaces and negativity might enter the host community due to tourism like racism, terrorism, drugs and alcohol problems. According to Stylidis et al. (2014), human rights also can be violated by tourism. Locals being displaced due to increased tourism are not an uncommon phenomenon in some of the developing countries. The behaviour of the tourists might affect the values of traditional cultures. For example, with the boom in the tourism sector of Australia, the security of the local communities decreased. The constant threats of terrorism from ISIS have affected the country’s security.  

The environmental impacts of tourism are discussed next. In the views of Vargas et al. (2014), the environmental aspects of a country are highly affected by the tourism industry. The environmental aspects mainly considers natural and ecological scenario of a country. There are many positive effects of tourism on the environment of the host country. It encourages the host communities to preserve wildlife and natural resources. Rain forests, exotic animals, and various others are there as example of wildlife and natural resources. Tourism in a country helps in generating money for maintenance of animals and wildlife. As tourism creates alternative sources of income, it reduces problems like deforestation and overfishing in a country. These are the main benefits faced by the developing countries. For example, tourism in Australia has improved its wildlife. As many tourists visit Australia to see kangaroo and marine exotics, the government puts many resources in maintaining those assets.

Positive Socio-Cultural Impacts of Tourism

There are various negative impacts of tourism on the environment of the host country. For example, tourism can implement harmful effects on a country’s water supply, coral reefs, beaches, forest, and heritage sites, which can be caused due to overuse. The traffic pollution can be increased due to high traffic emissions and littering. Increasing pollution and sewage production can also be caused by tourism. As stated by Mason (2015), these aspects affect a country’s environment badly as the negative impacts on the environment stays in the long run. Future generations of the host country will also be affected by the negative traits of tourism on environment. These traits can in turn affect the economy of the host country. For example, due to high number of visits in Singapore by the tourists, the traffic emission has risen. Every year the government of Singapore has to allocate a huge portion of the resources in maintaining the heritage spots in the country. According to Paramati, Alam and Chen (2016), the traffic emission and water pollution in the country has risen rapidly due to increased tourism in the country. The situation is shown in the following figure:

As shown in the figure above, during the morning, the air is unhealthy and as time goes by the pollution standard index suggests the air goes to a hazardous state, which affects the health of the local communities negatively.

The impacts of tourism in a country can play a crucial role in shaping its economy, socio-cultural and environmental scenario. The benefits of tourism a country can achieve are hard to compare to the negative effects from the country’s tourism.  The economical benefits are hard to avoid. According to García, Vázquez and Macías (2015), the national income of a country gains a lot from tourism. It also gives jobs to the unemployed people. However, the jobs created by tourism department are mostly seasonal. It breaks the illusion of increasing jobs.  Tourism brings more money to the economy, but the money mostly goes to the big companies. The locals get a little percentage of it. It does not serve the purpose of supporting tourism by the government (Boley et al. 2014). The cultural traits of the host country are valued and kept alive, are one of the positive points of tourism. However, the cultures and traditions are mixed with the same of the tourists. This goes against the efforts of the governments of keeping the native cultures alive. The money that the tourists give can be used to improve the situation of the host country’s natural landscape, but often it comes for a cost of the nature. The facilities that are created for the tourists can help the local people also, but it creates problems like overcrowding and traffic jams. Hence, the benefits that the host communities achieve from tourism come for a huge cost. It can create problems for the long run. This will make the local people suffer for generations. Thus, the negative effects of tourism are not totally outweighed by the positive effects as it creates long run issues for the host community. The present generation will benefit temporarily only which is not the aim of a government, but still some governments opt for it due to political and other pressures.

In conclusion, it can be said that tourism brings both positive and negative impacts on the host community in economical, socio-cultural and environmental aspects. The positive impacts may seem benefiting for the host community as the results are witnessed in the short run as shown in the examples of the countries from Pacific Asia region. However, the negative impacts are mainly for the long run that not only disturbs the host community’s present generation, but also it affects the future generation heavily. Tourism creates jobs, which reduces unemployment and adds money to the host country’s national income but this is seasonal. As the tourists stop coming the people who were working in the sector will be unemployed. The changes that have been made for the tourists will not come to balance in long run hence the life of the local communities will be disrupted.  It shows the statement of positive effects of tourism outweighing the negative effects in the host community not entirely true.

Boley, B.B., McGehee, N.G., Perdue, R.R. and Long, P., 2014. Empowerment and resident attitudes toward tourism: Strengthening the theoretical foundation through a Weberian lens. Annals of Tourism Research, 49, pp.33-50.

Chang, T.C., 2016. SINGAPORE TOURISM. The Routledge Handbook of Tourism in Asia.

Forsyth, P., Dwyer, L., Spurr, R. and Pham, T., 2014. The impacts of Australia’s departure tax: Tourism versus the economy?. Tourism Management, 40, pp.126-136.

García, F.A., Vázquez, A.B. and Macías, R.C., 2015. Resident’s attitudes towards the impacts of tourism. Tourism Management Perspectives, 13, pp.33-40.

Ghalia, T. and Fidrmuc, J., 2015. The curse of Tourism?. Journal of Hospitality & Tourism Research, p.1096348015619414.

Mason, P., 2015. Tourism impacts, planning and management. Routledge.

Meng, X., 2014. Is a tourism subsidy the best response to the global financial crisis? A short-run CGE simulation for Singapore. Asia Pacific Journal of Tourism Research, 19(3), pp.325-341.

Paramati, S.R., Alam, M.S. and Chen, C.F., 2016. The Effects of Tourism on Economic Growth and CO2 Emissions A Comparison between Developed and Developing Economies. Journal of Travel Research, p.0047287516667848.

Stylidis, D., Biran, A., Sit, J. and Szivas, E.M., 2014. Residents’ support for tourism development: The role of residents’ place image and perceived tourism impacts. Tourism Management, 45, pp.260-274.

Vargas-Sánchez, A., Porras-Bueno, N. and de los Ángeles Plaza-Mejía, M., 2014. Residents’ attitude to tourism and seasonality. Journal of Travel Research, 53(5), pp.581-596.