1. Tourism’s Effects on Communities The Good, The Bad, and The Ugly

2. The Multiplier Effect: Money is injected into an economy creates repeating benefits as the money is spent over and over again Money is spent by tourists, then circulated around local economy Like theory of “trickle down” economics, but it actually works!

3. The Multiplier Effect

4. BUT…there is a problem! Many things are owned by people outside the country This is called ‘foreign ownership’ This means the money leaves the country and does not benefit the local people This phenomenon is called TOURISM LEAKAGES

5. Leakages… A study of tourism 'leakage' in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand (via foreign-owned tour operators, airlines, hotels, imported drinks and food, etc.). Estimates for other Third World countries range from 80% in the Caribbean to 40% in India. Source: Sustainable Living Sustainable LivingSustainable Living

6. How does ‘Leakage’ Happen? Profits may go back to the community from which the original investment money came Some wages will be paid to foreign workers, who may send their wages out of the country Interest payments on loans made for investment in the hotel may go back to foreign banks

7. How does ‘Leakage’ Happen? Commissions may be paid to foreign travel agencies Advertising in foreign countries must be paid for Many goods and services (i.e. food!!!) must be imported Money may be spent on training foreign rather than local staff

8. What This Leads to… Tourist’s demands for local products can drive up the prices making things more expensive for the local people Many regions experience a “boom-bust” cycle due to the seasonal nature the tourism industry Reverse “Multiplier Effect” may occur

9. More Negatives of Leakage… Small developing economies have become dependent on tourism and are particularly susceptible to factors that affect the tourism industry: examples: rise in travel cost, world recession, changing dollar values, earthquakes and tsunamis, hurricane damage, 9/ 11, Swine Flu…

10. Cultural Impacts of Tourism The Demonstration Effect, on religious beliefs, dress, music, eating habits, and commercial practices Large-scale tourist developments changed rural living patterns Seasonal work patterns were altered Traditional skills of some workers were lost (fisherman become boat guides)

11. Cultural Impacts of Tourism Local art, music, and clothing styles were commercialized to cater to tourists Local foods, music, clothing styles, etc were changed or influenced by North American styles Local properties and areas of natural beauty were commercialized Crime levels increased

12. Strategies Used to Mitigate these Negative Effects A list of things done by Island nations to try to minimize the negative effects of tourism Develop tourism slowly and gradually Limit tourist development to preserve the physical and cultural environment Support non-tourist jobs Create a tourism-development zone (areas where tourism development will be allowed, and apply strict controls)

13. Strategies Used to Mitigate these Negative Effects Develop building design codes for new tourism facilities Give residents equal access to all tourist facilities and amenities Provide loans for local ownership of tourist facilities Develop strong links between tourism businesses and local suppliers Avoid overcrowding tourism facilities Provide professional tourism training for local people