International Tourism: Developing Countries' Tinsel Industry, A Review

"International Tourism: Developing Countries' Tinsel Industry:"

A Review

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"International Tourism: Developing Countries' Tinsel Industry"*

A Review

*Reviewed article authored by Mary Fish, University of Alabama as printed in A.J. Kondonassis, et. el. Major Issues in Global Development. Norman Oklahoma: University of Oklahoma Press, 1991, pp. 183-198


Fish's article describes the state of international tourism, its history, and its possible future.

Once touted as a poor country's great "hidden asset" on the road to development, more realistic assessments of tourism's possible impact on a nation's economy have been made in the light of the industry's post-Word War II accomplishments. In Fish's estimation, tourism will not necessarily benefit all countries, and some needn't expect much national growth to stem from its development. Tourism, however, run properly, and as part of a nation's integrated development strategy, can be a worthwhile national investment.

Internationalism tourism was once cited as a possible engine for development. Even today, figures associated with the industry suggest it can lend considerable strength to a country's economic well-being. First, international tourism's receipts rose from $2.1 billion in 1950 to $195 billion in 1988 (World Tourist Organization, 1989), almost an 100 fold increase and far beyond the rate of inflation. Moreover, poor countries earned $5.5 billion in 1988 while the oil countries (most of which were poor in 1950) earned only $7 billion dollars from oil. Further, experts were predicting a 4.5% real increase in annual earnings from international tourists of which the third world's share is expected to grow even faster (Economist, 1989).

Still, tourism has its drawbacks. First, a country must make a visit attractive for an international tourist. A number of factors come into play including: accessibility from development country, amount of government and international support, language, and economic/political ties to other nations. Moreover, though the author doesn't mention this, the country must have something in its history or cultural that is interesting enough to attract foreigners.

Second, tourism requires an infrastructure. Once a tourist arrives in the country, the host nation must have facilities that will allow that person to enjoy his stay and, hopefully, spend the foreign currency the country hopes to attract. This means the host country needs an airport of some type, transportation to and from major sites, developed sanitation, reasonably safe food, and a support staff that knows the visitor's language.

Third, the industry must be organized in such a fashion that all of the benefits of tourism are not lost. The largest single item the tourist buys, for example, is an airline ticket, and most of that money may end up in the hands of a foreign firm. Similarly, if the visitor stays in an international chain hotel and buys imported food, most of the value of his trip, again, leaves the country. The proportion of foreign income that actually stays in the country may be relegated to purchases from a few street vendors and paying the salaries of the support staffs.

Fourth, the host country must be willing to deal with the "cultural baggage" that the tourist brings with him. The visiting foreigner, particularly in a third world country, is an intrusive element. His or her habits may offend local peoples, encourage bad habits, such as begging and prostitution, and destroy local sites.

Fifth, the tourist industry tends to be seasonal and subject to the unpredictability of international events. The tourist season revolved around the summers and Christmas seasons of the Western visitors, causing off-seasonal idleness. A predicted boom season, moreover, can be destroyed by a single event, such as the short-lived military take-over in Thailand in 1992 or the plague breakout in India.

Fish advocates, then, that a country considering international tourism plan carefully and do a cost-benefit analysis before expending effort to develop an industry. Several key factors must be considered:

1) the cost of imported goods necessary to support a foreigner versus expected spending
2) the cost of building infrastructure necessary to support the tourist versus the gains to be earned by spending elsewhere in the economy
3) the diversity of the economy, since the more diverse the economy the more higher the multiplier effect (Milne, 1987).
4) the social impact, including the likelihood that the rich will gain the most from the industry

For some countries, a rational assessment would lead to the conclusion that tourism is simply not worth the expenditures. These include countries like Laos, the Congo, Mongolia, etc. For other countries, however, tourism makes sense, particularly if they are, like Thailand or Malaysia, near take-off and can benefit from an influx of foreign exchange.

Fish advocates a policy of, essentially, isolating foreigners within specially-designed enclaves. The infrastructure costs, then, could be kept relatively low. Further, the amount of personnel needed to deal with the foreigners could be kept at a reasonable level. Ideally, these enclaves would be located near areas ready to develop, i.e., somewhere like Tijuana rather than Cancun, in which foreigners would be presented a kind of Disneyland version of the native culture. Initially foreigners would finance the bulk of the industry, except for the infrastructure, but eventually nationals would develop hotels even airlines that would compete with the foreigners. As the country became more used to foreigners, the enclaves could be expanded or their number increased, and the host country could take an increasing share of the revenues.

In conclusion, Fish thinks that tourism, as an industry, will continue to grow. Countries who manage their industries will be able to use the industry as an aid to industrialization and as a source of foreign aid. Country's who mismanage their tourism industry will end up expending money need elsewhere while foreign nations end up earning money from their culture.



In general, I agree with Fish's analysis, particularly since I've traveled to many first and third world countries over the years. Some of her key points require elaboration and modification.

First, tourism does not make sense for all countries, and for some countries devoting more than a minimal effort on the industry would constitute a waste of money. On the other hand, however, this doesn't mean that these countries can't earn some foreign exchange from tourism. Making such minor efforts as marking important sites in several languages, distributing free tourist literature, simplifying or eliminating visa requirements, and making visitors feel welcome will attract many travelers such as myself. I would comment that in my trip to Southeast Asia two years ago, the countries that took those steps tended to be those countries in which I spent the most money. While these countries cannot attract, and shouldn't attempt to attract, the tour groups, they can benefit from the trickle of foreign exchange that comes from travelers willing to "tough it out."

Second, in the cost benefit-analysis, a country needs to consider the diversion of its human resources to tourism as an important consideration in deciding how much effort to expend on tourism. In countries such as Mexico and Jamaica, the vast majority of its entrepreneurial talents seemed to devote themselves to selling trinkets to tourists, rather than in developing the economy. When you consider how many college graduates, the only people in many third world countries who can speak a second language are diverted to the tourist industry, the cost becomes more serious. Again, many of these countries would be better off pursuing a more limited investment in tourism.

Third, while, in general, I agree with Fish's idea of setting up "tourist enclaves," to deal with international visitors, I think that the idea has a certain cynicism that would detract many tourists. For Japanese tourists, with large budgets and burdened by an obscure language and short vacations, this approach may be perfectly viable. As international awareness rises, however, tourists of other countries will be more willing to learn other languages or words from other languages, study about other cultures, and deliberately not spend much time in the "tourist traps" Fish advocates. Again, the best policy may be a concentration on tourist "enclaves" supported by a minimalist strategy in the hinterlands.

Fourth, I think Fish rightly stresses the need for tourism as part of a balanced portfolio. A country such as China which is attracting foreign capital for other reasons or Thailand would be well-advised to dust off its temples in order to extract a few more dollars or yen from the visitor before his departure. On the other hand, countries such as Egypt, dealing with a host of other problems, would be well-advised to invest in other areas.

In general, then, I agree with Fish's assessment of the tourist industry and its potential. A developing country, the focus of this article, might benefit from investing a lot of money in tourism, and then again, it might not, and careful assessment of its position and strategy needs undertaken before it opens its arms to a flock of international visitors.

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