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There are many hidden costs to conventional tourism and they can have unfavourable economic effects on the host community. Often rich countries are better suited to profit from tourism than poor ones. Although the least developed countries have the most urgent need for income, employment and general rise of the standard of living by means of tourism, they are often the least capable to realize these benefits. Among the reasons for this are large-scale transfer of tourism revenues out of the host country, exclusion of local businesses and products.




The direct income for an area is the amount of tourist expenditure that remains within its borders. Very often, this is a relatively small amount due to "leakage" - the amount of money that is drained out of an area due to tax payments, profits and wages paid outside the area and expenditure for imports. When tourists demand standards of equipment, food and other products that the host country cannot supply. In most all-inclusive package tours, about 80% of travellers' expenditures are leakage. They go to the airlines, international companies (who often have their headquarters in the travellers' home countries) and not to local businesses or workers.

Local businesses often see their chances to earn income from tourists severely reduced by the creation of "all-inclusive" vacation packages. When tourists remain at the same cruise ship or resort for their entire stay, which provides everything they need and where they will make all their expenditures.This means that there is not much opportunity left for the local people to profit from tourism. All-inclusive import more and employ fewer people per dollar of revenue than other hotels (Source: Tourism Concern).

Sustainable tourism towards a green economy (Green Economy Report, 2011)

Tourism in a green economy refers to tourism activities that can be maintained, or sustained, indefinitely in their social, economic, cultural and environmental contexts: “sustainable tourism”.

Sustainable tourism is not a special form of tourism; rather, all forms of tourism may strive to be more sustainable (UNEP and UNWTO 2005).
Tourism can have positive or negative impacts depending on how it is planned, developed and managed. Various enabling conditions are required for transforming tourism to contribute to social and economic development within the carrying capacities
of ecosystems.

To promote sustainable tourism in a green economy, the national, regional, and local economy should first provide a good investment climate, featuring security and stability, regulation, taxation, finance, infrastructure, and labour. Various tourism stakeholders should collaborate and share knowledge and tools in order to understand the overall picture of environmental and socio-cultural impacts of tourism activities at destinations.

There is also a need for policy coherence, which can include economic instruments and fiscal policy to reward sustainable investments and practices and discourage the most costly externalities associated with uncontrolled tourism expansion. In the case of tourism, government and private tourism authorities
should coordinate with ministries responsible for the environment, energy, agriculture, transport, health, finance, security, and other relevant areas, as well as with local governments.


Infrastructure cost

Tourism development can cost the local government and local taxpayers a great deal of money. Developers may want the government to improve the airport, roads and other infrastructure. Possibilities to provide tax breaks and other financial advantages which are costly activities. Public resources spent on subsidized infrastructure or tax breaks may reduce government investment in other critical areas such as education and health.

Increase in prices

Increasing demand for basic services and goods from tourists will often cause raised prices that negatively affect local residents whose income does not increase proportionately. Tourism development and the related rise in real estate demand may dramatically increase building costs and land values. Not only does this make it more difficult for local people to meet their basic daily needs; it can also result in a dominance by outsiders in land markets and in-migration that erodes economic opportunities for the locals. Long-term tourists living in second homes cause price rises in their new homes if their numbers attain a certain critical mass.

Economic dependence on tourism

Many countries have embraced tourism as the single most important way to boost their economy. This has made them very vulnerable to anything that negatively affects the local tourism industry (e.g. terrorist scares, military conflicts, impacts of natural disasters) have a devastating effect on overall economic climate. The Turkish economy for example has suffered a lot because of the war in Iraq at the beginning of the twenty-first century.

Seasonal character of jobs

The seasonal character of the tourism industry creates economic problems for destinations that are heavily dependent on it. Problems that seasonal workers face include job (and therefore income) insecurity, usually with no guarantee of employment from one season to the next, difficulties in getting training, employment-related medical benefits, recognition of their experience, unsatisfactory housing and working conditions.



Exercise for user

Public concern about the negative impacts of mass tourism has led to a reappraisal of the notion that tourism should be encouraged at all costs. Its growth creates problems, especially where fragile and remote environments are visited. Many commentators have attempted to categorise the positive and negative environmental effects of tourist development. These can be both generic and location specific.

With specific reference to the coast list a set of potential positive and negativer environmental effects associated with tourism development.