Geography Reference
In-Depth Information
As well as acting as entrepreneurs, governments can also stimulate tourism in several
ways: first, financial incentives such as low-interest loans or a depreciation allowance on
tourist accommodation or infrastructure, although 'their introduction often reflected both
the scarcity of domestic investment funds and widespread ambition to undertake
economic development programmes' (Bodlender and Davies 1985, quoted in D.G.Pearce
1992b:11); second, sponsoring research for the benefit of the tourism industry rather than
for specific individual organisations and associations; third, marketing and promotion
generally aimed at generating tourism demand, although it may also take the form of
investment promotion aimed at encouraging capital investment for tourism attractions
and facilities (Hall 1995).
One of the more unusual features of tourism promotion by government tourism
organisations is that they have only limited control over the product they are marketing,
with very few actually owning the goods, facilities and services that make up the tourism
product (D.G.Pearce 1992b). This lack of control is perhaps testimony to the power of the
public good argument used by industry to justify continued maintenance of government
funding for destination promotion. However, it may also indicate the political power of
the tourism lobby, such as industry organisations, to influence government tourism
policies (Hall and Jenkins 1995).
Throughout most of the 1980s and the early 1990s, 'Thatcherism' (named after
Conservative Prime Minister Margaret Thatcher) in the United Kingdom and
'Reaganism' (named after Republican President Ronald Reagan) in the United States saw
a period of retreat by central government from active intervention. At the national level,
policies of deregulation, privatisation, free trade, the elimination of tax incentives and a
move away from discretionary forms of macro-economic intervention, were and have
been the hallmarks of a push towards 'smaller' government and lower levels of
government intervention. Given such demand for smaller government in western society
in recent years, there have been increasing demands from government and economic
rationalists for greater industry self-sufficiency in tourism marketing and promotion. The
political implications of such an approach for the tourism industry are substantial. As
H.L.Hughes (1984:14) noted, The advocates of a free enterprise economy would look to
consumer freedom of choice and not to governments to promote firms; the consumer
ought to be sovereign in decisions relating to the allocation of the nation's resources.'
Such an approach means that lobbyists in the tourism industry may do better by shifting
their focus on the necessity of government intervention to issues of externalities, public
goods and merit wants rather than employment and the balance of payments (Hall 1994).
'Such criteria for government intervention have a sounder economic base and are more
consistent with a free-enterprise philosophy than employment and balance of payments
effects' (H.L.Hughes 1984:18). Nevertheless, as D.G.Pearce (1992b) recognised,
general destination promotion tends to benefit all sectors of the tourist
industry in the place concerned; it becomes a 'public good'…. The
question of 'free-loaders' thus arises, for they too will benefit along with
those who may have contributed directly to the promotional campaign.
(D.G.Pearce 1992b:8)
