Tourism and Economic Development Issues - Tourism and Development: Concepts and Issues - page 98

(Kotler et al. , 1993). In other words, tourism is expected to bring prosperity
to ailing economies (Swarbrooke, 2000), with examples being Baltimore and
Boston in the 1970s and Essen and Dortmund in Germany in the 1990s.
Rosentraub and Joo (2009) studied more than 300 metropolitan areas in the
US that invested in amusements and sports attractions and found this invest-
ment to be associated with a higher level of employment in the tourism
sector, household incomes and local businesses. In all cases, however, it was
not only the 'take-off' of declining areas through tourism development that
was hoped for. That is, there is some evidence that increasing tourism can
also increase the attraction of places to foreign investors and, as Sandford and
Dong (2000: 217) demonstrate, tourism stimulates direct investments in a
wide variety of (non-tourism) industries and subsequently gives rise to eco-
nomic development.
Furthermore, any clear-cut understanding of the relationship between
tourism and development based on a world divided into developed and less
developed countries and regions may also be criticised. For example, it neglects
the fact that although developed countries may earn substantial absolute
amounts of direct tourism expenditure, these are often relatively unimportant
as a share of total GDP. At the same time, a developed country's travel balance
deficit may be significant. A good illustration is Germany which, on one side,
has gained a reputation for being 'the world champions of travelling' (Schnell,
1998: 269), but, on the other, is also a tourism destination. In 2010, for
example, Germany's tourism balance showed a deficit of around US$43.4
billion, with the US$78.1 billion spent by Germans abroad easily exceeding
the US$34.7 billion the country earned from foreign visitors (Table 3.1).
Moreover, an oversimplified theory of tourism development also neglects
the fact that tourism expenditure per visitor per day is normally higher if a
developed country or region is being visited (see Table 3.1). From this it is pos-
sible to speculate that developed countries are able to add higher value to their
tourism product. Thus, it is logical to suggest convergence in economic devel-
opment cannot be achieved through the development of tourism. This is not
to say that tourism does not represent a development opportunity for less
developed countries, helping them to achieve economic growth and restruc-
ture their domestic economies. However, it must be concluded from the anal-
ysis of added value that the power of tourism as a means of development
depends on the existing development level in the tourism destination country
or region. In other words, it is not only the development level of the tourism
sector that is important, but also the degree of development of other sectors
of the economy (also see the discussion on the third stage of tourism develop-
ment and capital-output ratios in the preceding section on tourism and devel-
opment). Taking into account the dependency of different sectors that, within
the host economy, must be involved to satisfy the demand for tourism, it is
clear that a better developed economy will be able to earn more, and also
retain more of those earnings, within the national economy or region.