1. TOURISM POLICY AND PLANNING CHAPTER 4 PROF. DR. KEMAL BİRDİR MERSİN UNIVERSITY MARCH 2016

2. Tourism as a commercial and economic activity Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle or starve to death. It doesn’t matter if you are a lion or a gazelle, when the sun comes up, you had better be running.

3. Tourism as a commercial and economic activity When strategically well-planned and executed, tourism provides an economic stream both into and throughout a country or state/province and is an incentive to preserve the best things the destination has to offer – from its scenic coastlines, its wildlife habitats, its historic districts, its local culture, folklore or heritage.

4. Tourism as a commercial and economic activity Through collective promotion, coordination and marketing of a variety of attractions, the local communities will have the opportunity to increase economic development, realize increased revenues, create new jobs, benefit from a diverse economy, add new products, generate additional income, spawn new businesses and contribute to overall economic integration while enriching the public and private sector partnerships and improving the quality of life of the local citizenry. Figure 4.2 illustrates the schema of tourism as a commercial and economic activity.

5. Indications herald that tourism will grow steadily over the next 20 years as we see a worldwide increase in leisure time and disposable income for millions of people in both the developed and developing countries of the world. Historical information provided by the United Nations World Tourism Organization (2005) tells us: ‘[s]ince 1950, when international travel started to become accessible to the general public, tourist activity has risen from 25 million to around 800 million arrivals (or more) in 2005. International tourism receipts have risen from US $2.1 billion to US $623 billion in 2005’. Indeed, for the most part, shorter working hours, greater individual prosperity, faster and less expensive travel, the impact of advanced technology and the consumers’ use of the Internet have all helped make the travel and tourism industry the fastest-growing industry in the world. Impact of business and international education travellers further affect this growth.

6. Global importance As an economic factor, tourism is growing faster than the rest of the world economy in terms of visitor expenditures, export output, capital investment, income and employment. The UNWTO has displayed the impact that international tourism has worldwide in ‘Tourism Highlights 2006 edition’ by summarizing International Tourist Arrivals (Table 4.1) and International Tourism Receipts (Table 4.2).

7. Tourism as an economic development tool Tourism: a. stimulates the development of basic infrastructure (such as airports, harbours, roads, sewers and electrical power); b. contributes to the growth of domestic industries that supply the tourism industry (e.g., transportation, agriculture, food processing, commercial fishing, lumbering construction); c. attracts foreign investment (especially in hotels); and d. facilitates the transfer of technology and technical know-how.

8. DEMAND SIDE OF TOURISM Tourist’s demands and preferences New product expectations Experience as a mean of travel activity New trends and tendencies

9. SUPPLY SIDE OF TOURISM A. Pricing – the affordability of destination – an unfavourable exchange rate – a drop in traveller’s discretionary income B. Quality – adequate accommodations – substitution of activities – local environment

10. SUPPLY SIDE OF TOURISM C. Knowledge of location – good transportation – security/safety of place – visitor information

11. COOPETITION is the need for cooperation among tourism destinations in order to better market the tourism product effectively and meet the competition at the regional or global level. In effect, this means that local communities that might otherwise compete against each other need to form partnerships or alliances to better market their tourism products and to increase the number of visitors from further distances

12. Comparative advantage Comparative advantage in the supply of tourism resources, services and facilities. – Such as good beaches, beautiful mountains, historic monuments, progressive transportation systems and other supply side attractions having potential as tourism ‘products’ are as important to a country as the production and export of more tangible products such as oil and steel

13. EMPLOYMENT AND INCOME While creating jobs, international tourism is an important generator of national income as well. Foreign visitors make large expenditures on a wide variety of goods and services, and these yield a substantial increase in income. They are interested in shopping for high-quality goods, good dining, general sightseeing and cultural activities, which in turn represent a significant source of foreign exchange receipts

14. MULTIPLIER EFFECT A number which indicates the magnitude of a particular macroeconomic policy measure. In other words, the multiplier attempts to quantify the additional effects of a policy beyond those that are immediately measurable. For example, a decrease in taxation will have more of an effect than just the value of the reduced taxes. It will lead to greater disposable income, which might cause an increase in consumption, which in turn might increase employment in industries, which enjoy greater demand and so on. So the total effect of the implemented policy equals the effect of the policy measure, times the multiplier. This is true of most macroeconomic policy measures, because the actual effect of the measure cannot be quantified by the effect of the measure itself.

15. MULTIPLIER EFFECT there are five main types of multipliers, which are generally accepted: 1. Transactions or sales multipliers. An increase in tourist expenditure will generate additional business revenue. This multiplier measures the ratio between the two changes. 2. Output multiplier. This relates the amount of additional output generated in the economy as a consequence of an increase in tourist expenditure. The main difference with the transactions or sales multiplier is that the output multiplier is concerned with changes in the actual levels of production and not with the volume and value of sales. 3. Income multiplier. This measures the additional income created in the economy as a consequence of the increased tourist expenditure. 4. Government revenue multiplier. This measures the impact on government revenue as a consequence of an increase in tourist expenditure. 5. Employment multiplier. This measures the total amount of employment created by an additional unit of tourism expenditure.