Tourism: An Attractive Industry For Economic Development

Abstract

Tourism is widely recognized as an important catalyst for economic growth. According to the United Nations World Tourism Organization (UNWTO), the tourism industry is amongst the biggest industries that make substantial contribution to the economy in terms of its contribution to the GDP, the revenue generated, increased employment and other benefits.

The success of the tourism industry begs the question what are the characteristics that make it an attractive industry for economic growth. In order to respond to this question, this analysis will explore on the various tourist attraction sites including natural and cultural attractions, heritage sites, national and wildlife parks, theme parks, gardens and museums, beaches and coastal regions, and entertainment and events. This will include examining how these attractions contribute to economic development. UK will be used as the case study.

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Introduction

Tourism is widely recognized as an important catalyst for economic growth. According to the United Nations World Tourism Organization (UNWTO), the tourism industry is amongst the biggest industries that make substantial contributions to the economy in terms of its contribution to the GDP, the revenue generated, increased employment and other benefits (Business tourism 2003).

Take for example the UK, the 6th largest destination in the world attracting over 32 million overseas visitors yearly (Williams et al., 2010). UK’s tourism industry is the 5th largest industry and contributes to a large proportion of the GDP. In 2007, the industry was valued at ?114 billion representing 8.2% of GDP and employing over 2.65 million people (Williams et al., 2010). In 2009, the industry was valued at ?115.4 billion of the UK economy, hence representing 8.9% of UK GDP (Williams et al., 2010). The tourism industry is further anticipated to grow yearly at 2.6%, a growth rate similar to that of retail and construction industries (Williams et al., 2010).

Indeed, tourism increasingly continues to become an attractive industry for economic growth with an increasing number of visitors. This begs the question what are the characteristics that make tourism an attractive industry for economic developmentThis analysis is thus intended on exploring on these characteristics with a focus on the factors that lead to economic development. Before giving an overview of the fundamental aspects of the economics of tourism, we will first define what we understand by the term “tourism”

What Is Tourism

The term “tourism” was first defined by Hunziker and Krapf (1942), the main pioneers of tourism research. They defined tourism as a sum of relations and phenomena that resulted from travelling and staying of non-residents. In this context, a stay does not result into permanent residence of the individual and is not in any way connected to permanent or temporary earning activity. This conceptual definition was for a considerable time generally accepted but had certain flaws. For example, a visit to the hospital could be considered as a form of tourism. Furthermore, under this conceptual definition, non-residents were only identified with foreigners; hence domestic tourism had no place in it.

In the later years, a more succinct definition of tourism was put forth by the British Tourism Society. Based on the work of Burkart & Medlik (1974), the British Tourism Society adopted the following definition.

Tourism is deemed to be inclusive of any activity concerned with short-term movement of people to destinations other than their neither main continuous domiciles nor place of work (Burkart & Medlik 1974.

Within this conceptual definition, activities involving a stay or a visit to the destination are included. It also allows for domestic and day visits as well. This definition still applies up to date.

Another conceptual definition that deserves special attention is that put forth by Gilbert (1990). Gilbert (1990) posits that tourism is a part of recreation that involves travelling to other destinations for a short term-period with the aim of satisfying a consumer need. This definition places tourism in the overall context of recreation. Recreation according to Cooper et al. (1993) refers to the pursuits engaged in during leisure time. However, it should be noted that tourism is not only confined to activities carried out during leisure time. Part of the tourism (business tourism in particular) takes place during working time including conventions and business meetings.

Tourist Sectors

Tourism comprise of five main sectors:

• The Attraction Sector: – this sector comprise of the natural and cultural attractions, heritage sites, national and wildlife parks, theme parks, gardens and museums, beaches and coastal regions, and entertainment and events (Anon 2004).
• The Accommodation Sector: – this sector comprise of the hotels, motels, apartments, villas and flats, guest houses, holiday villages, campsites, marinas, touring caravans and condominium timeshares (Anon 2004).
• The Transport Sector: – Consists of the airlines, railways, shipping lines, car rental operators, and bus and coach operators (Anon 2004).
• The Travel Organizer Sector: – the sector covers tour operators, travel agents and incentive travel organizers among others (Anon 2004).
• The Destination Organization Sector: – this includes regional and national tourist offices, local tourist officers and tourism associations (Anon 2004).

In order to answer the question: what are the characteristics that make tourism an attractive industry for economic development, we will explore on the attraction sites discussed above. This will also include exploring on business tourism and its contribution to economic development.

Cultural and Heritage Attractions

Cultural and heritage attractions play a significant role in the tourism industry. Most of the world heritage sites have a cultural significance that transcend national boundaries and of importance to the present and future generations. Currently, there are 890 world heritage sites reflecting a rich diversity of the world’s cultural heritage (Endresen 1999).

In the United Kingdom, sites as diverse such as the Giant’s Causeway, City of Edinburgh, Blaenavon Industrial landscape, and Manchester City help make up the UK’s heritage (UNESCO 2009). In this context, Manchester city, one of the most vibrant cosmopolitan cities has a thriving art and cultural scene that attracts a large number of visitors. The city’s attraction centres include the sports stadiums, museums and galleries, and music venues (UNESCO 2009).

The rich cultural heritage, vibrant arts scene and the multicultural population in UK makes it a very attractive tourist destination. Museums which showcase the best of Britain’s culture and history attract millions of international and domestic visitors. Britain’s culture and heritage is estimated to attracting 4.5 billion worth of spending by inbound visitors annually (UNESCO 2009).

Natural Landscape Sites

Another popular attractive site in the tourism industry is the natural landscape. Natural landscapes such as Stonehenge, the most famous and mysterious landmark in the UK, attracts a vast number of tourists (Mieczkowski, 1990). Built over 650 years ago and consisting of a ring of monolithic stones, the landmark is a very popular attractive site.

Scenic landscapes such as the Wye Valley, an internationally protected landscape straddling the border between Wales and England also attracts a large number of visitors (Mieczkowski, 1990). This area that covers parts of Hertfordshire, Gloucestershire and Monmouthshire is widely recognized for its gorgeous scenery and dense native woodlands as well as for its wildlife and archaeological remains (Mieczkowski, 1990).

National and Wildlife Parks

National parks also play a huge role in the tourism industry. Britain’s finest national and wildlife parks, zoos and animal attractions such as the Animalarium attract a large number of visitors (Mathieson & Wall 1982). The national parks offer a variety of activities ranging from walking, exploring on the rich and cultural heritage to pursuing other activities such as cycling, rock climbing, and absailing among others (Mathieson & Wall 1982). An estimated 110 million people are estimated to visit national parks in England and Wales annually (UNESCO 2009).

Entertainment and Events

Entertainment and events also play a major role in the tourism industry. Majority of the concerts and music festivals taking place in the UK attract more than 7.7 million visitors, domestic and overseas combined (ICTHR 2010). The significant amount of revenue generated from entertainment and events is used in boosting the UK’s economy. A great majority of these tourists are UK residents who travel outside of their regions to attend events and see their favourite artists perform live in another region within the UK (ICTHR 2010).

London dominates as the destination for live music tourism in the UK. Music tourists at the capital outnumber the local music fans. Its dominance can be attributed to the high number of domestic music tourists attending concerts. With a population of more than 7 million people, the region is host to the O2 Arena, the most successful concert venue in the world (ICTHR 2010). London region is also a host to Wembley stadium and Royal Albert Hall as well (ICTHR 2010). Its parks, mainly Victoria Park, Hyde Park and Clapham are home to a growing number of music festivals (ICTHR 2010).

Beaches and Coastal Areas

Beaches and coastal areas are also a huge attraction site for tourists. Tourism in the south of Wales, for example, is primarily focused on the coastal areas in order to attract its visitors. The Welsh tourist industry which is worth ?3.5billion and makes a significant contribution to Wales’ GDP relies largely on its excellent coastal scenery in attracting tourists (Williams, et.al, 2010)

Business Tourism

Another important, yet least acknowledged component of the tourism industry is business tourism. It is one of the most lucrative components of the tourism industry with various benefits that stimulate the growth of the economy. In the UK, business tourism is a wide sector encompassing

• Conferences and meetings – the British Conference Market Trends Survey 2001 estimates this to be worth around ?7.3 billion annually (Business report 2003).
• Exhibitions and trade fairs: – these are listed as the 5th largest marketing medium in the UK attracting 11% of the media expenditure and are estimated at ?2.04 billion annually (Business report 2003).
• Incentive travel: – the value of inbound incentive travel market is estimated to be around ?165 million annually (Business report 2003).
• Corporate events: – estimates for this segment are between ?700 million and ?1billion annually (Business report 2003).
• Outdoor events: – a rough estimate of the outdoor events is around ?1billion annually (Business report 2003).

In the past few decades, business tourism has grown significantly exceeding the overall tourism growth rate. According to the International Passenger Survey 2001, business tourism accounted for 29.7% of all overseas visitors to the UK and 31.7% of the inbound earnings (Business report 2003).

From what can be discerned, investment in business tourism can significantly stimulate the growth of the economy. It may lead to regeneration of urban and inner cities as evident with Birmingham, Glasgow, Cardiff, Belfast and Manchester (Business report 2003). Its resilience during the great recession makes it even more an attractive industry for investment. The business tourism proved resilient, being less affected by economic downturns and by disasters such as the Foot and Mouth Epidemic unlike leisure tourism (Business report 2003).

With the above in mind, it is worthy examining some of the main elements that make attractions to be appealing to many.

Characteristics of Tourist Attractions

It is important to recognize that tourists’ attractions are not all equal. Some may have more potential to draw visitors than others. The main elements that set attractions apart include quality, uniqueness, authenticity, drawing power and activity options.

Quality: – high quality is a key principle for tourism development. This means offering smooth customer oriented operations and procedures and ensuring that attractions have a pleasing appearance and that they are visitor friendly (Merchant 2005). This includes asking these questions

Is the attraction visitor friendly
How does it rate in terms of the appearance, hospitality, operations and resource protection

Authenticity: – authenticity refers to originality. For example, if it is a cultural heritage attraction, authenticity would imply letting the distinctive local flavour of the community to shine in ways that create a “sense of place”(Merchant 2005). We can consider:

• Whether the attraction reflects the natural and cultural heritage of the community
• Uniqueness: – this is the “edge” that sets attraction apart from competition. It involves asking the fundamental question:

Is the attraction unique

Take for example, The London Eye which is sitting on the South Bank of River Thames. Hanging like a gigantic wheel, this landmark is instantly recognizable. It is currently the biggest Ferris wheel in Europe standing 135 metres high and supported by a giant A-frame which juts the spindle (UNESCO 20090. This makes it unique from other Ferris wheels which use two A-frames and axle support method.

• Drawing Power: – this is a measurement on the power to attract a large number of visitors (Merchant 2005).
• Activity Options: – this is an important characteristic of attractions (Merchant 2005). It involves assessing whether the attraction site offer a varied and changing set of activities.

Conclusion

Indeed, tourism is an attractive industry for economic development. Major attraction sites including the scenic landscapes, cultural and heritage sites, national and wildlife parks, landmarks, theme parks, gardens and museums, beaches and coastal regions, and entertainment among others attract a large number of visitors. There is no doubt that the industry contributes to a large proportion of the GDP and is responsible for employing millions of people. This makes it an important industry for investment.

References

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