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The role of tourism in development: enhancing foreign exchange earnings Alan Marvell Geographical Association Annual Conference 2011.

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Presentation on theme: "The role of tourism in development: enhancing foreign exchange earnings Alan Marvell Geographical Association Annual Conference 2011."— Presentation transcript:

1 The role of tourism in development: enhancing foreign exchange earnings Alan Marvell Geographical Association Annual Conference 2011

2 Importance The maximization of foreign exchange earnings is a high priority for most countries and in developing countries it is often the primary objective of tourism policy. Tourism earnings are often the most effective, or even the only way to produce the foreign exchange needed for the import of goods and services essential for national economic growth (Wheatcroft 1998, p. 166). Wheatcroft, S. (1998) The airline industry and tourism. In: Ioannides, D. and Debbage, K.G. (eds) The economic geography of the tourist industry. London: Routledge, pp Geographical Association Annual Conference 2011

3 Foreign exchange and tourism World Tourism Organization (2010) Tourism highlights Madrid: World Tourism Organization, p.6. Geographical Association Annual Conference 2011

4 All-inclusive holidays Issue: To what extent will holiday makers be encouraged to spend money in the local economy and explore the environs beyond the hotel? 8 April 2011 First Choice (part of TUI) announced that from 2012 its holidays will be all-inclusive Demand grown by 32% in 5 years 65% of First Choice holidays are already all- inclusive A rebranding exercise to distinguish between Thomson and First Choice brands Geographical Association Annual Conference 2011 Source: A. Pingstone (2007) Image of aeroplane removed for copyright reasons

5 Economic impact Direct spending by visitors is only the tip of the iceberg Relatively easy to measure: visitor numbers, expenditure The indirect impact of tourism is much larger Hard to measure: subsequent spend by suppliers, induced effects, investment, etc Source: Visit London (2006) Geographical Association Annual Conference 2011 Image of iceberg removed for copyright reasons

6 Tourism multipliers Cooper, C., Fletcher, J., Fyall, A., Gilbert, D. and Wanhill, S. (2008) Tourism principles and practice, 4th ed. Harlow: Pearson Education Limited, p.139. Geographical Association Annual Conference 2011

7 Types of linkage between tourism and the local economy Ashley, C. (2006) How can governments boost the local economic impacts of tourism? London: Overseas Development Institute. Geographical Association Annual Conference 2011

8 Gambia is Good ?v=V41vIRu48S4&feature= player_detailpage Geographical Association Annual Conference 2011

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10 Training farm The Gambia is Good initiative (GiG) now supplies many of the hotels in the main resorts, collecting and selling fresh produce from community farms. Approximately 1000 farmers have been trained, and 90% of the trainees were women. Almost £175,000 has gone directly into the hands of Gambian farmers, by selling more than 500 tonnes of locally grown produce to hotels. The range of produce grown has diversified and the quality of produce has increased. GiG created the first online ordering system in The Gambia. Because of its innovative entrepreneurial approach, GiG has won a number of international awards: The World Business and Development Award in 2008, the Virgin International Responsible Tourism Award for Poverty Reduction in 2008 and the 2009 TODO! Award for its work in promoting sustainable tourism. Source: The Travel Foundation (2011) Geographical Association Annual Conference 2011

11 Issues for the future A report by four post-graduate students at the Saïd Business School, Oxford University. Ebrahim, Z., Hartman, M., Quinn, M. and Schlagenhauf, J. (2009) Strategic consulting report: Gambia is good. London: Concern Universal, p. 9. Geographical Association Annual Conference 2011

12 Recommendations 1. Commit to being a business rather than an NGO project: For GiG to become a stand-alone business, clear and consistent leadership, communication, and action are required from key leaders and decision makers, along with changes to GiGs organisational culture and structure. 2. Emphasise the development of local management: Local managers must be provided with opportunities to make increasingly important decisions and learn from their mistakes. 3. Motivate local staff to perform: Management must act to foster a team identity, enhance the abilities of GiG staff to succeed in their jobs, and provide incentives for when they do. 4. Establish clear decision making criteria: Decisions should be based on a set of guiding principles with a clear focus on profitability. 5. Formalise and enforce critical processes and communication paths: Where informal processes and systems exist, they should be documented and enforced by management; where they do not, they must be established. 6. Enhance seasonal differentiation strategies: Along with capturing the upside potential in the full tourist season, strategies for reducing operating costs and increasing revenues in the off-season must be developed. Ebrahim, Z., Hartman, M., Quinn, M. and Schlagenhauf, J. (2009) Strategic consulting report: Gambia is good. London: Concern Universal, pp Geographical Association Annual Conference 2011

13 Conclusion Foreign exchange earnings need to be looked at on a case by case basis due to localised factors and relationships with foreign investment. Local production and services are vital to add to the chain of production and reduce economic leakage. However, local production must meet expectation in terms of quality, price, quantity and reliability. It is clear that tourism development needs to be part of a holistic development policy and not seen in isolation to the rest of the countrys economic activity. Geographical Association Annual Conference 2011 Source: Access Gambia (2011) Image of beach removed for copyright reasons

14 Useful resources Concern Universal Overseas Development Institute Pro-Poor Tourism The Travel Foundation World Tourism Organization World Travel and Tourism Council Geographical Association Annual Conference 2011


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