1. Positive Economic Impact Elaboration Example
1. Contribution to revenue When a tourist visits a country, he will spend In Singapore, the tourism
on food, accommodation and entertainment industry generated about
i. taxation on tourism- which provides earnings/profits to the food, S$22.2 billion in 2011 and
related goods hotel, leisure, retail and transport industries S$18.9 billion in 2010.
which are charged taxes.
ii. development of
infrastructure Governments will receive more taxes from
the industries and from goods and services
taxes/CESS to build physical and social
infrastructure to improve the supply factors to
attract more tourists and earn more revenue.
2. Multiplier effect World Travel and Tourism
Council (WTTC)
estimates that tourism
generates an indirect
contribution equal to
100% of direct tourism
expenditures.
The tourist’s money is circulated through the
country and promotes development and as it
circulates, its value multiplies to several times
its original value. This strengthens the
economy in various sectors (esp other
industries)
3. Creation of employment Tourism, being a labour-intensive industry, According to the World
requires large numbers of workers since there Tourism Organisation
are many tourist amenities that need to be (WTO), tourism accounts
maintained and ran. for 6-7% of jobs
worldwide.
Direct employment and indirect employment
creates jobs for the economy and this reduces
unemployment.
(*) –minor impact, not so important

2. 4. Economy diversification Tourism ensures that a country does not fully
depend on certain industries (eg. manu-
facturing or farming) by having tourism as a
back up industry to save them when the niche
industries do not do so well due to external
factors (eg. reduced demand)
5. Improved accessibility Due to increased accessibility, people in
rural villages can now work in the towns.
As a result, the villagers will earn better
incomes and enjoy a higher standard of living.
More equal distribution of wealth is a result.
6. Creates goodwill When people attend conventions, meetings The 5-year contract to host
and exhibitions, they are exposed to the the Formula 1 night race
possibility of their putting their invest- has been awarded to
ments in Singapore by hosting more of such Singapore for goodwill
events in Singapore. has been spread to foreign
investors.
As a result, more conventions and events are
carried out and these investments speed up
economic growth of both countries.
7. Increase in foreign Foreign investors are attracted by the level Macau has a thriving
investments of development in a country with a good textile, electronics and toy
tourism industry as they usually have good industry yet it has attracted
accessibility. As a result, they will want to set foreign investors into
up their new businesses here which will setting up a tourism
attract more foreign investors of other industry there where there
industries. are a wide range of hotels
and resorts.
8. Stimulation of To increase the attractiveness of the tourism Peninsular Malaysia’s
investment in industry, the local government may be eastern coast is seeing
infrastructure driven to make infrastructural improve- rapid development in
ments such as better water and sewage infrastructure such as the
systems, roads, electricity, telephone and extension of the N-S
public transport networks. highway and the
construction of airports so
This improves the quality of life among locals that it can attract more
and facilitates tourism. tourists from the more
developed western coast.
(*) –minor impact, not so important

3. Negative Economic Impact
Elaboration Example
1. Leakage The amount of money that remains locally Of each US$100 spent on
after taxes, profits and wages are paid outside a vacation tour by a tourist
the area and after imports are purchased is from a DC, only around
usually a small amount of the tourist’s total US$5 actually stays in a
expenditure. LDC destination’s
economy.
Import leakage occurs when DCs need to
import certain demands of the tourists (eg.
Evian mineral water) Tourism leakages:
1. 70% in Thailand
Export leakage occurs when DCs need the 2. 80% in Caribbean
help of overseas investors to build tourism 3. 40% in India
facilities like hotels and take their profits back
to their country of origin.
3 main leakages:
airlines, hotels, tour agents
2. Enclave tourism “All-inclusive” vacation packages reduces
the chances of local businesses to earn
income from tourists as these packages have
everything they need and where they will
make all their expenditures.
Tourists rather stay in the ships where
everything is present than explore the local
area where the ship docks for a few hours.
3 eg of enclave tourism:
cruises, club meds, resorts
3. Inflation Increased demand for basic necessities from Prices of basic necessities
tourists will cause prices to increase. like sugar and rice have
However, this price hike is not proportional increased in Johor Bahru
to the rise in income of the locals. because Singaporeans go
there to buy them at
Wealthy businessmen who buy homes in DCs cheaper rates, increasing
cause prices of the homes to skyrocket if demand there.
their numbers attain a certain critical mass.
Prices of houses in once-
Dominance by outsiders in land markets used-to-be-deserted
reduces economic opportunities for the locals Sentosa Cove are
as prices of land will increase with skyrocketing due to rapid
increasing demand, disempowering residents. development of Sentosa.
(*) –minor impact, not so important

4. 4. Unequal development Governments may wrongly focus their The rural areas are very
resources on the tourism industry hence the much less developed as
primary and secondary industries are less compared to Kathmandu,
developed because it sees tourism as a more the capital city of Nepal as
lucrative industry. tourists usually flock to
Nepal’s more developed
areas.
5. Overdependence on As a result of the under-developed primary % revenue from tourism:
tourism and secondary industries which earn very 1. 83% in Maldives
little as compared to the developed tourism 2. 21% in Seychelles
industry, the government may over depend on 3. 34% in Jamaica
the tourism industry because it becomes the
main revenue earning source for the country. Crises that have occurred:
1. 2008 global meltdown
However, this overdependence is risky as 2. 2004 Ind Ocean tsunami
unexpected events like terrorist attacks, 3. 2003 SARS
natural disasters and global recessions will 4. 2002 Bali Bombing
greatly impact tourist numbers and weaken 5. 2001 Sep 11 attacks
the economy severely. 6. 1998 haze in SEA
7. 1997 Asian econ crisis
6. Seasonal unemployment In certain areas, there are some periods or In Peninsular Malaysia’s
seasons when tourism becomes inactive or eastern coast which is
dormant because of natural factors like exposed to the NE
monsoon rains. monsoon, the off-peak
season occurs around Sep-
Workers do not earn incomes during these Feb when hotel occupancy
off-peak seasons resulting in insecurity, drops and beach resorts
difficulty in getting training, medical benefits closes down.
and no guarantee in a job next season.
7. Infrastructure cost The cost of building and maintaining large Beijing’s Bird Nest and
stadiums and specialised buildings is very Japan’s sports stadiums
high and often drains money that could be are seen as white elephants
channeled to other critical areas like as they are of limited use
education and health. after the sporting events
they hosted.
(*) –minor impact, not so important

5. Positive Socio-cultural
Elaboration Example
Impact
1. Force for peace When tourists go to another country, the
contacts between the locals and tourists builds
bridges across societies and communities.
This increases chances to develop mutual
sympathy and understanding and to reduce
their prejudices leading to decrease of
tension and world peace.
2. Shared use of tourism When the government builds tourist Gardens by the Bay
facilities attractions, the locals can also visit the planned to open in 2012
attractions as a form of leisure. This provides free entry to
increases living standards with this upgraded Singaporeans besides
infrastructure. being a tourist attraction.
3. Preservation of heritage Renewal of interest of own culture Shophouses along the
Singapore River and in
Events and festivals of which local Telok Ayer/Emerald Hill
residents have been the primary are preserved to retain the
participants are often rejuvenated and heritage.
developed to meet tourist demands
(renewal of interest of own culture) The Singapore Inter-
national Dragon Boat
Reduced problems of squatter settlements Festival was rejuvenated
to meet the changing
The jobs created by tourism can act interests of tourists and
as a vital incentive to reduce locals.
emigration from rural areas
4. Pride in own culture Tourism helps raise local awareness of the Tourism has forced the
financial value of natural and cultural sites Balinese to reflect on their
and stimulates a feeling of pride in local and artistic output as just one
national heritage and interest in its cultural identifier. The
conservation. praises of tourists on
Balinese art and culture
give the Balinese
confidence and pride in
their art.
(*) –minor impact, not so important

6. Negative Socio-cultural
Elaboration Example
Impact
1. Conflict of resource use Competition for resources may result in According to World Wide
local communities having to pay higher taxes Fund for Nature (WWF),
for resources such as water and electricity. tourists and tourism facil-
This is especially so in countries with water ities in Spain use up to
and fuel scarcity. 850l of water/person per
day, 4x of a city dweller.
2. Commodification Tourism can turn local cultures into The Hangi Feast in New
commodities (marketable items produced to Zealand used to be done
satisfy wants or needs) when religious rituals, the traditional way using
traditional ethnic rites and festivals are altered the earth but due to time
to suit tourists’ wants, resulting in what has constraints and hygiene, it
been called “reconstructed ethnicity”. is now served buffet style.
3. Loss of authenticity, Adapting cultural expressions and The traditional Maori
staged authenticity manifestations to the tastes of the tourists dance used to be perf-
or even performing shows as if they were ormed only by males but
“real life” constitutes “staged authenticity”. now it is also performed
by females and involves
the tourists also.
4. Standardisation Destinations risk standardisation in the
process of satisfying tourists’ desire for
familiarity. While the culture, food,
accommodation must meet the desire for new
and unfamiliar, they must not be too strange
for them.
Hence, tourists look for recognisable facilities
in the new environment like international
hotels (eg. Hilton, Holiday Inn, Hyatt) and
fast-food chains (eg. McDonalds, Starbucks)
5. Development of pseudo1 During mass production of local handicrafts, The Capitol Building, an
-culture they use cheaper materials and non- old cinema, houses shops
traditional production methods. catering to tourists.
(pseudo1: fake and not real)
Old homely original atmosphere is lost when Shophouses in Singapore
buildings are given way for tourist-oriented lose their actual purpose
activities. after preservation.
(*) –minor impact, not so important

7. 6. Economic inequality Due to the large income difference between In DCs like Jamaica and
the tourism workers in LDCs and the tourists Indonesia, local people
from DCs, the copying behaviour of the employed by the industry
workers to have what the tourists have may receive only 1% of the
cause social and ethnic tensions among them. guest’s income at home.
7. Job level friction In DCs, many low level jobs like housemaids
and waiters are occupied by unskilled and
poorly trained locals while the higher-paying
and managerial jobs are occupied by
foreigners. This may cause conflict, friction
and increases cultural gap.
8. Clash of values, Tourists tend to bring behavioural norms and Tourists visiting Muslim
irritation due to tourist culture which are not appropriate to local countries often disregard
behaviour people (eg. wearing bikinis at the beach of a or are unaware of the prev-
conservative country). Locals then pick up alent dress code and stan-
more materialistic and extravagant attitudes dard behaviours and it has
from them and adopt more liberal attitudes become an incentive for
towards sexual behaviour which is contrary locals not to respect their
to local customs.This leads to irritation and own traditions and relig-
stereotyping among locals towards the ion, leading to tensions
tourists. within the local
community.
9. Crime generation Growth of mass tourism typically increase In Rio de Janeiro, Brazil,
crime rates because the large number of tourists staying in beach-
tourists and their valuables increases the side 5-star resorts close to
attraction for criminals and brings with it extremely poor commun-
activities like robbery and drug dealing. ities in “favelas” are at risk
of pickpockets.
10. Prostitution and sex The commercial sexual exploitation of Some cities and countries
tourism children and young women has increased have specialised streets
along with the growth of tourism. famous for such activities
for example de Wallen in
Though tourism is not a direct cause, it Amsterdam and Patpong
provides easy access to it because it brings in Bangkok.
consumerism to parts of world which did not
use to have it.
The lure of easy money does cause people to
trade their bodies. It has even encouraged sex
slavery where children are sold into brothels.
(*) –minor impact, not so important

8. 11. Child labour (*) Poor children in LDCs are forced to work as Child labour is a serious
they can be paid very little for their services problem in Jakarta where
and are more flexible employees. These some of them are even
children are forced to sell small souvenirs and kidnapped for this reason.
clean car windows at a junction when cars
stop.
12. Resettlement of locals(*) In order to provide land for the new tourist The residents in
attractions, the people who originally reside Chinatown had to be
there have to be moved away from there. This moved to other parts of
leads to them losing their historical areas and Singapore so that it could
sense of identity. be developed into a tourist
destination.
13. Old buildings to be Due to competition for scarce land, old and The old RI campus has
demolished for new rundown buildings have to be cleared despite been cleared to make way
buildings (*) their value to make way for the modern Raffles City Shopping
buildings like hotels and shopping centres. Centre, a busy shopping
centre in City Hall.
Positive Environmental Elaboration Example
Impact
1. Conservation of natural Potentially valuable tourist destinations such Chek Jawa, a precious
areas as beaches, forests and mountains are likely to coastal habitat, has been
be conserved and converted to national parks conserved by Nature
and wildlife parks. Society Singapore after
being threatened by
This reduces the destruction of these reclamation.
habitats to a bare minimum.
(*) –minor impact, not so important

9. Negative Environmental Elaboration Example
Impact
1. Pollution Land, sea and air transport, a major feature A single transatlantic
of tourism, contributes large amount of return flight emits half as
CO2, a greenhouse gas leading to global much CO2 as a person in a
warming. year.
When tourists visit natural attractions like Littering has become so
beaches, they tend to litter contributing to bad in the Andes
land and water pollution. mountains that there is a
Toilet Paper Trail, a trail
Untreated sewage poured into the sea and of litter especially toilet
improper waste disposal contributes to water paper.
pollution especially in LDCs where water
treatment facilities are absent. Cruise ships in the
Caribbean produce more
than 70 000 tons of waste
per year.
2. Deforestation To make more land for the tourist attractions, Due to deforestation,
forests are cleared on the large scale. This Cameron Highland
causes climatic changes, ecosystem changes receives less rainfall at
and higher soil erosion which are effects of 2420mm in 2010 as
deforestation. compared to 2580mm on
average and the temp-
erature has risen by 2-3°C.
3. Loss of coral reefs Sewage runoff stimulates the growth of algae Coliform bacteria which
which cover the filter feeding of corals, have faecal origin have
killing them. As a result, eutrophication been found at high levels
occurs. in Pattaya, Thailand in
1990s.
Sewage pollution can harm human and
animal health. Coral harvesting, fishing and
snorkelling damage coral reefs which take 50
years to replace. Pleasure boats powered by
oil may cause leaks that pollutes the water.
4. Impacts of marina Harvesting of sand and the building of hard In the Philippines and
development engineering methods at coasts alters the Maldives, dynamiting and
coastlines and currents and affects the coral mining for coral for resort
reefs and fishes hence destroying the coastal building materials has
habitats. damaged fragile coral reefs
and depleted the fisheries
that sustain locals’ income.
(*) –minor impact, not so important

10. 5. Alteration of ecosystems Habitats can be degraded by activities such In Kenya, tourist activities
as wildlife viewing because the noise and have been so disturbing
commotion created by tourists stresses the that animals, at times,
animals. This changes the behaviour of the neglecting their young or
animals. fail to mate.
6. Depletion of natural Increased construction of tourism and
resources recreational facilities has increased the
demand and pressure on the natural
resources. Given demand in other industries,
the amount of resources being depleted is
closing in on what there is left.
7. Endanger species (*) Illegal collection of animal parts to be sold to The illegal collection of
black markets because of the high prices that turtle eggs of the Giant
are offered for it. Leatherback Turtle of
the east coast of
Peninsular Malaysia
causes the number of
turtles to dwindle.
(*) –minor impact, not so important