Impact of Tourism

  • Post last modified:28 August 2021
  • Reading time:15 mins read
  • Post category:Tourism

7 Impact of Tourism

  1. Socio-cultural Impact
  2. Environmental Impact
  3. Political Implications
  4. Tourism Industry Characteristics
  5. Tourism and Profitability
  6. Destination Life Cycle
  7. Carrying Capacity

Socio-cultural Impact

Among the most debated issue pertaining to the tourism in the Third World are those related to the effect that tourists and the industry have no societies and cultures of local communities. A general argument is that tourism contributes to international understanding and harmony.

On the contrary it has severely affected indigenous customs and ways of life in certain cases. The demonstration effect therefore contributes to deepening the real as well as the perceived gulf between the tourist and the host.

It creates conditions where residents may try to copy tourist behavior and speeding patterns, at the same time resenting their inability to do so and lacking comparable purchasing power. At many destinations social tensions emerge in the form of:

  1. Increase in begging,
  2. Prostitution,
  3. Cheating,
  4. Mugging of tourists, and
  5. Drug peddling.

Environmental Impact

Different kinds of tourism activity effect the natural and built environment. There is a complex interaction between tourism and the environment. Many studies have shown that tourism has an immense impact on the physical environment, and that little has been done to remedy or control the assault on the ecology.

This is especially distressing in view of the fact that a major part of tourism depends on nature: mountains, beaches, deserts, forests, wildlife, water-bodies and the like, Tourism destroys tourism, an oft-repeated tourism, is one which has seldom entered the consciousness of planners and developers.


Different sorts of tourism have varying impacts on the environment. A useful case study can be the experience of promoting national parks and forest areas for tourists.

Tourism in National Parks, Reserves and Sanctuaries has considerable effects on the wildlife which range from disruption of animal feeding and breeding patterns to providing the impetus to maintain such protected areas.

However, as mentioned earlier, unplanned tourism puts enormous pressure on the carrying capacity of the area which has severe effect on the wildlife. Tourism can also be an advantage to conservation because when the common man understands and experiences wildlife he can play an active role in protecting nature.

Political Implications

The links between tourism and politics in many Third World nations are almost inevitable. Given the need to boosting images of their sagging regimes and fattened bureaucracies, politicians often see the tourism industry as a direct way of gaining powerful friends, including Western governments, and agencies and investors.

A healthy balance of payment can be achieved by prominently displaying gross earning from tourism, which in turn can be used to obtain aid and investments. On the part of the critics, they have emphasized several aspects of tourism that have during political implications. Some of which are:

  1. The relationship of ‘Master-slave’ between tourism and locals, akin to that of channel realities.

  2. The priority given to external assistance, investments and imports, over and above developing local capabilities, enterprise and production.

  3. That a priority for tourism takes budgetary allocations away from social sectors such as education, health, sanitation and provision of other basis necessities.
  4. That tourism being of a volatile nature, over-dependence on it can be dangerous for a country’s future development which ought to be more diversified, less mono-cultural.

  5. The lack of protection for works in the tourism industry. Several other arguments can be citied, not least of which is the issue of land use for recreational purposes. In the context of inadequate and ineffective land reform policies.

Primarily, the issue is one of democratic participation in decision making about tourism. Tourism activists make the point that they have the right to have their opinion heard and take into consideration, since the development of tourism has a direct repercussion on their economy, ecology, culture and everyday life.

Governments and industry must realize that the underlying conviction is the desire for greater political participation in economic and social processes, of which tourism is only a part.

Ignoring this sentiment can only lead to greater dissatisfaction, further agitations and campaigns, even attacks on the industry and tourists, as has happened in some parts of the Third World. Such a situation would hardly be a conducive setting for attracting tourists.

Tourism Industry Characteristics

The tourism industry and its products and services fall under the wide umbrella are complex in nature. There are a number of features that make it unique. Tourism is a subjective experience and an amalgam of products and services. It is not a single product.

Tourism product, like all services, is intangible. The tourism product is not a homogeneous product. Services cannot be standardized. Hotels attempt to standardize their rooms and services delivery as efficiently as possible through staff training and quality control procedures, but the human ingredient complicates the equation.

  1. Tourism products are perishable: An unsold Park Grand hotel room, an unused Qantas aircraft seat and a vacant Opera House concert seat is revenue lost. They cannot be stored for later use, as can tangible products.

  2. Small business industry: Tourism has been described as the classic small-business industry. More than 70 percent of businesses in the hospitality sector employ less than ten persons. One of the reasons for the small business concentration is the ease of entry into the industry.

    Anyone with a yacht, a farm, or a four-wheel drive can set up business targeting tourists.

  3. Decentralized industry: Tourism is a diversified and decentralized industry. The commercial imperatives that drive tourism change according to the location; as do the environmental, social and cultural impacts of tourism on particular communities.

    Different tourism products have different trade associations, such as hotels, marine parks or inbound operators. Regional as well as urban areas have their own associations.

  4. Government controlled and private-sector driven: Governments provide relatively little assistance to the tourism industry. The hotel industry has staged a long and hard battle to gain recognition as a service exporter such that it can be deserving of export grants.

  5. Problem of over-consumption: Tourism must be one of the few industries in which too many customers can be detrimental. This can apply to the social and environmental impact on local communities.

    The more tourists you have the more expensive infrastructure you have to provide for them, the quicker your environment will be degraded past a point of diminishing returns. The argument can be extended to other areas. It is well known that several leading hotels and resorts in Australia have a policy of restricting the number of Japanese guests in their properties.

  6. High inter-dependency among sectors: A feature of tourism is its high degree of interrelatedness. For example, resort or hotel development cannot begin without adequate airports and roads to bring tourists to those properties.

    The development of Bangalore Greenfield Airport, for example, was sparked by The GMR take over. This situation is A classic chicken-and-egg scenario. A typical example is the development of the Hyderabad as a southern Northern gateway into India. Other sectors are developed due to the operation of two new airports at Bangalore and Hyderabad.

Tourism and Profitability

Many sectors under the tourism umbrella complain of poor profits. A 1991 survey of hotels around the world by consultants Horwath and Horwath showed that Australias hotels had the worst profit record.

Australian hotels returned -3.3% on funds invested, Asian hotels had 27.1% , Europe 16.6 % and even a high-cost country such as Canada had 12.1%. The Australia tourism industry still has not tackled the three issues that most affect profitability.

These are higher building costs than Asia or the US, such that the capital outlay per room or bed is much higher; hotel and resorts operating costs are too high, especially compared with competing resorts in Asia and the Pacific and finally, Australian hotels and resorts have very seasonal and highly unpredictable occupancies and cash flows.

Destination Life Cycle

According to Butler (1980) every destination goes through a life cycle. This life cycle encompasses six major stages:

  • Exploration
  • Involvement
  • Development
  • Consolidation
  • Stagnation
  • Decline

Each stage can be associated with specific economic, ecological and socio-cultural impacts.


During the exploration phase, drifters discover a destination. They come in very small numbers and accept local conditions. Contact between hosts and tourists is mutually satisfactory, so the euphoria level on the Doxey scale applies.

In this phase no disruption of local society occurs. No tourism facilities or accommodation are avail able. Although relationships between hosts and guests may be intense, overall impacts are small because numbers are small.

Usually leakages from the local economic system are small, since most food and building materials, to name a few examples, are produced locally.


Once the local population notices that tourism can be (financially) beneficial to them, local initiatives may be employed to build facilities and accommodation. This is the start of the involvement phase.

Developments in this phase are usually quite slow, because of social or financial constraints. The destination’s destiny is still firmly in local hands.


Take-off for the destination occurs in the development phase. Local people see opportunities for further growth of the tourism industry. However, not enough knowledge and investment capital are available within the region to fully capture the opportunities.

Several solutions are possible to this problem. If sustained organic growth is regarded as desirable, tourism development is usually constrained financially. This means that development will be slow in terms of tourists and expenditure.


When arriving at the consolidation phase enough facilities and accommodations are available to receive early mass tourists. These tourists come in a steady flow and look for Western amenities.

In the consolidation phase tourism has become institutionalized. The destination has become a product which is marketed by international tour operators. Local control has diminished even further. In economic terms, both initial tourist expenditure and leakages may be considerable. Because of the sheer number of tourists, much money enters the economy.


Tourist numbers are highest in the stagnation stage, although growth rates are low. In this stage massive numbers of tourists come on fully standardized packages and they expect Western amenities.

To be able to offer these, a destination often separates tourist resorts from the local population. For the tourists, a so-called “environmental bubble” is created in which the tourists can feel at home and safe. However, this separation may have serious consequences for the host population. Often, for example, use of beaches is restricted to tourists.

Carrying Capacity

In the context of tourism, the concept of carrying capacity can be defined as the maximum number of people who can use a site without an unacceptable alteration in the human and natural environment and without an unacceptable decline in the quality of the experience gained by visitors.

The concept of carrying capacity is used mostly when assessing the environmental impacts of tourism. However, the concept is also applicable to other impacts such as socio-cultural and economic ones.

For at least four of these dimensions one can imagine the existence of a carrying capacity:

  1. Economic health
  2. Well-being of locals
  3. Protection of resources
  4. Healthy culture

Assume respect for the economic, social, environmental and cultural carrying capacities respectively. Maybe satisfaction of guests can also be described in such terms: a “satisfactional” carrying capacity.

According to Muller sustainable tourism can only exist if none of the mentioned carrying capacities are violated. In practice, however, there appears to be a trade-off between the short term need for economic development and the long term sustainability interests.

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