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

The role of tourism in development: enhancing

foreign exchange earnings

Alan [email protected]

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

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. 159-179.

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

Foreign exchange and tourism

World Tourism Organization (2010) Tourism highlights 2010. Madrid: World Tourism Organization, p.6.

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

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

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

Source: A. Pingstone (2007)

Image of aeroplane removed for copyright reasons

Economic impactDirect 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)

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

Image of iceberg removed for copyright reasons

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.

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

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.

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

“Gambia is Good”

http://www.youtube.com/watch?v=V41vIRu48S4&feature=pla

yer_detailpage

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

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)Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

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.

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

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 GiG’s 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. 6-7.

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

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 country’s economic activity.

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11

Source: Access Gambia (2011)

Image of beach removed for copyright reasons

Useful resources

Concern Universalhttp://www.concernuniversal.org/index.php?/homeOverseas Development Institutehttp://www.odi.org.uk/Pro-Poor Tourismhttp://www.propoortourism.org.uk/The Travel Foundationhttp://www.thetravelfoundation.org.uk/World Tourism Organizationhttp://unwto.org/enWorld Travel and Tourism Council

http://www.wttc.org/

Ge

og

rap

hic

al A

sso

cia

tio

n A

nn

ua

l Co

nfe

ren

ce

20

11