Travel Reference
In-Depth Information
case of Europe may confirm the above argument about the differing travel
balance of developed and developing countries. For instance, within Europe,
the countries of highly developed western and northern Europe have a nega-
tive tourism balance, whereas southern and eastern European countries have
a positive balance. Equally, on a global scale a large, positive tourism balance
tends to be enjoyed by less developed countries as the majority of emerging
economies in Table 3.1 show a positive travel balance. In addition, this is also
very much the case for many less developed countries not shown in Table 3.1.
Hence, in many cases a deficit in the tourism balance is a characteristic of
developed countries. Yet, it becomes obvious that some highly developed
countries do not follow the expected pattern and, even more, while total
tourism earnings in advanced economies exceed tourism spending the oppo-
site is the case for emerging and developing countries.
Nevertheless, for developing countries tourism is thus seen as a relatively
cheap and easy - and sometimes the only - way of earning the foreign cur-
rency required to invest in development. Since many countries face 'balance
of payments difficulties because of a deficit in the trade account or capital
account, or both' (Witt, 1989: 487), international tourism receipts can help
to alleviate such balance of payments problems and contribute to the finan-
cial resources needed for economic and social development.
However, tourism's overall contribution to the current account may be
reduced by a host of factors (Williams & Shaw, 1998: 6). First, it is important
to consider the overall balance between international tourism receipts and
expenditures. Second, there are leakages of expenditures from the national
economy, the level of which is a function of the import propensity of the
country, partly a function of the structure of the ownership of tourism and
related industries, and partly a function of the degree of development of
domestic industries and their ability to meet tourists' needs from domestic
production. Third, the demonstration effect additionally increases the import
expenditures of a country as the local population imitates tourists' consump-
tion patterns and increases its demand for imported goods. Fourth, the
upward pressure of inbound tourism on the exchange rate may cause adverse
effects on the balance of payments. Because of a higher value of the national
currency due to increased foreign tourism demand, the country's exports
may decrease which will offset any positive balance of payments tourism
effect (Dwyer et al. , 2010).
Environmental goods valuation in tourism
Tourism is able to increase the economic growth rate and GDP in a des-
tination via the environmental goods valuation process. Environmental
goods, in tourism defined as natural or socio-cultural attractions, have a
potential or optional value that is not derived from their current use when
tourism development had not yet begun. They are free or public goods and,
Search WWH ::




Custom Search