Tourism and Economic Development Issues - Tourism and Development: Concepts and Issues - page 86

60.22% of world tourism spending (Table 3.1). Over time, ever more emerg-
ing and developing countries have opened up and invested in tourism devel-
opment as they seek to turn modern tourism into a key driver of their social
and economic progress. This is demonstrated by the UNWTO rankings of
the top 20 tourism countries (Table 3.2). According to 2010 data on interna-
tional visitors, there are 10 emerging and 10 developed countries among the
top 20, a ratio of 10 to 10. Twenty years ago the ratio was 6 to 14. Emerging
countries are also well represented on the tourism earners list, although
financial tourism flows are more in favour of advanced (14) than emerging
economies (6). Twenty years ago this ratio was 17 to 3 in favour of advanced
economies. It is expected that lists will further develop in favour of emerging
destinations owing to the quantitative growth of tourism that is expected to
continue, and the increased efforts of such countries to attract visitors and
increase their spending whilst visiting.
Relationship between tourism and economic development -
capital coeffi cient analysis
The economic argument for tourism as an agent of economic growth and
development is frequently derived from a capital-output ratio analysis, with
the capital-output ratio being based on the amount of capital required to
produce a single unit of output in the economy. 3 It represents the ratio
between the capital input and the output produced over a particular period
of time and, therefore, an increase in the rate at which capital produces a unit
of output (i.e. a lower capital-output ratio will enhance the economic growth
rate). In the specific context of tourism, a capital-output analysis is based on
a comparison of the tourism sector capital-output rate and the equivalent
rate calculated for the whole economy (Mihalič, 2002c; Planina, 1997). It
divides tourism development into three stages according to tourism's contri-
bution to growth of the local destination economy.
During the first development stage (equivalent perhaps to Butler's (1980)
exploration stage), tourism development is spontaneous and unsupported by
either a tourism development policy or intensive capital investment. When
tourists come, their hosts '. . .get together and rent rooms, offer meals. . .they
purchase a slot machine. One of them gives up fishing and takes the tourists
out in his boat, a woman converts her house into a pension. . .another
woman begins to weave for visitors. . .' (Krippendorf, 1987: 3). In other
words, pioneer tourists visit attractive places and generate some expenditure
in the host region; in response, without the benefit of any purpose-built
tourism infra- and superstructure, the local community improvises in its
attempts to satisfy tourists' needs. At this stage, the average capital-output
ratio in the 'tourism sector' is low, and much lower than the average for the
economy as a whole. Certainly, tourism businesses contribute to economic
growth in the region, although tourism earnings in this first stage are not