Tourism: The Great Illusion
(A summary of a chapter by John Madeley, 2008. Big Business, Poor
People)
Tourism is the only major sector of the international
trade in services in which there have been consistent surpluses. It is the
second largest foreign currency earner for developing countries. According to
the United Nation’s Conference on the Trade and Development, the developing
world’s balance of trade in tourism although roused from US$6 billion in 1980
to US$62.2 billion in 1996.
But the promise to provide much for the
host country is an illusion. The fact is that the Trans-National Cooperation
(TNC) reaps the benefits of the tourism industry through their ownership of
hotels, airlines and tour operators. The main actors are from the developed
countries. The host country is often left with harms in its environment. When a
tourist visits their shores, developing countries are often left with less than
a third of the money the tourists pay.
Economic desperation has played a part in
the rise of the Third World’s tourism industries. According to Veronica H. Long, a tourism
specialist, she points out that tourism development is often seen as a
relatively quick and simple solution to the problems of economically
underdeveloped regions, as the use of natural attributes of an area can provide
a quick economic return. But the negative aspects of the industry are rarely
calculated.
Three Branches
Tourism TNCs are defined by the World
Tourism Organisation as ‘foreign enterprises providing services for movements
of persons with direct foreign investments or other forms of contractual arrangements
in one or more receiving country. They often prefer not to invest their money
directly and exercise power with a minimum financial stake.
Many kinds of TNCs can be found in the
international tourism industry. The most important are airlines, hotel and
restaurant chains, tour operators and travel agencies. They account for a
substantial part of international tourism transactions.
According to Harvey Perkins, 13 TNCs
dominate tourism industry. Six from USA, four from France and one each from
Australia, UK and Canada. He estimates that four of them operate 97% to 100% of
the hotels outside their country. Many kinds of TNCs can be found in the
international tourism industry. The most important are airlines, hotel and restaurant
chains, tour operators and travel agencies. They account for a substantial part
of International tourism transactions. The trend is the majority of the tourist
purchased their tickets from tour operators based in developed countries , use
an airline based in that country and stay in a hotel that is part-owned or
managed by TNC hotel group or sometimes everything through the same
corporation.
1. Airlines
Airlines move over 80 percent of international
tourists. Many of the airlines companies have subsidiary tourism operations
including direct investment and contractual arrangements with Hotel and
restaurant chains, tour operating companies, catering and travel agencies. Many
airlines also have affiliates in developing counties, covering such as
catering, insurance, computer service, technological services an shipping.
Changes
of policy by international airlines, over which developing countries have no
control, can drastically affect receipts from tourism.
2. Tour Operators
Tour operators are the wholesalers
that put together the various elements of a tour or travel package, thus
achieving significant price reductions to pass on to consumers. Some operators
are part of TNCs that include hotel chains and airlines. They sell their tours
through travel agents making persuasive advertising that gives idyllic image of
the developing country but does little or nothing to show what it is really
like.
3. Hotels
Hotels have the biggest impact on
developing countries. Majority of the hotels are owned or affiliated to TNCs.
According to United Nations, 60 percent of the hotels in Asia are affiliated to
transnational hotel chain linked by management contract, 23 percent by
franchise and 15 percent by equity share.
The local hotels are faced with
more bargaining strength vis-à-vis TNC hotel chains on more favorable terms
through management contract.
In
developing countries, the hotel chains swarm like bees round a jam jar.
Transnational corporations usually prefer
not to own hotels abroad, or even to have a direct financial stake in them.
Hotel chains make most of their money either managing hotels or simply charging
very high fees for the use of their brand name, points out Koson Sriang,
executive Secretary of the Ecumenical coalition on the Third World
tourism. Management agreements and
franchising dominate the industry, accounting for over 90 percent of
TNC-associated hotels in developing countries.
Under management agreement, a TNC
undertakes the operation and management of a hotel n a developing country which
is owned by local interest. On the other hand, franchising allows a local
company to use the name, trademarks and services of the TNC hotel chain in
return for a sizable fee (usually a fixed sum plus a percentage on rooms). The hotel is then promoted as a member of the
TNCs group of hotels, example, Holiday Inn trade names. If anything goes wrong,
like sever economic downturn, it’s the local firm that can go bust and TNB
bears no risk.
Boosting Business
For TNCs, cutting cost and boosting
business is the name of the game and they are quick to stop bottlenecks that
are impeding growth. For example providing a training course – to boost
business. At the same time to cut cost, Airline TNC recently switches much of
its office work to developing countries with low wage cost – where labors costs
are lower. TNCs are constantly on the look-out for new destinations and
opportunities.
Foreign exchange
Due to ‘leakages,’ high percentage of the
tourist money goes to the TNCs (foreign owned airline, tour operator and hotel)
and net foreign earnings for host countries are much lower. For example in the
Caribbean, leakages range from 30 to 80 percent of nominal flows of foreign
currencies, 77 percent leakage for Gambia, and in the Pacific is between 75 to
78 percent when both hotel and airlines owned by foreign companies and 55 and
60 percent in the case of foreign airline but locally owned hotel. That means
that more foreign exchange stays in the country when hotels are owned by
locals. In Kenya, the leakage is lower in the case of safari holiday (34 to 45
percent, spent on ground transport than beach holidays (62 to 78 percent,
leakage on tour operators through food and accommodation. Therefore, Kenya
fared much better from Safari than from beach holiday.
Employment
In some countries, tourism employs over
half the labor force. Most of the jobs are unskilled, poorly paid, and even
less privileged groups such as women and young people are not employed. According to International Labor Organization
report, remuneration of employees in hotels and restaurants seems at to be at
the lower end of the salary spectrum. And even the irregularities in the
workload and trying to provide a courteous and friendly service. Many trade
unions are weak and cannot speak out for the people, rules and standards are
not adhered to.
Tourism can help upgrade skills (e.g.
computer skills in the hotel) which in turn helps the host country. Other spin
off benefits in terms of job like washing clothes, baby sitting, cooking or sex
services, says Anne Badger. Tourism has the potential to both degrade and
improve women’s status.
Serious downsides for employment are that
it displaced local people from work they have done all their lives – fishing
communities, often ranked as losers from tourism trade. Most hotels are built
close to beaches and locals are cleared away with no compensation and even
local fishermen were forbidden to fish within miles of new hotel (e.g. Philippines).
Again, when jobs are created, they may not
go to the local people. Many developing countries do not speak English fluently
or none at all. Some TNC requirement could be 100 percent English fluency (e.g.
Mexico). That means that employment is restricted to educated outsiders.
Trained workers from other parts of the country dominate the work force. Jobs
that they create (cleaning, caring etc.) do not advance people’s dignity and
sense of worth. In some case, very few jobs are created and little economic
development is occurring in tourist areas.
But is it Development
In most countries, there is little
evidence that tourism has helped development. The spin of benefits are often
few and cost is high. Economics have to be adapted to suit tourists needs;
land, beach, water etc., for hotels and holiday complex. Tourism industry tends
to buy its wares from outside – other countries.
Food output and farmer incomes in the
host countries can be stimulated if hotel buy their food locally. This does not
often happens. People often have no or little power over an industry. They can
lose their home, land, traditional means of livelihood; survival becomes
dependent on serving the wealthy tourists. Big demand water by hotel can means
that they drill all the waters leaving farmers with less water and this can
affect farmers, or local food supply.
Culture
In the process of experiencing and
visiting cultural and heritage sites, it contributes to the destruction,
diminishing the sacredness of local sites. ‘Tourism is a cultural
prostitution’, believes Haunani-kay Trask, Professor of American studies at
Manoa University on Hawaii. One of the worst human and cultural aspects of
tourism is that it has lead to a big increase in prostitution. This is evident
in countries like Thailand and Philippines. An estimated one million children
in developing countries are caught in slavery of child prostitution, mostly
promoted by the tourist trade. TNC tour operators have been involved in this
business.
Environmental Damage
As the number of tourists increase, so
also does the environmental damage, the very environment that attracts them. Burning
down of forest to built hotel complex, polluting of squatter settlement, parks
turned into dustbowls by tourist’s vehicles etc. According to Indonesia’s head of Tourism
planning has warned that traditional life on the island of Bali is threatened
by environmental damage caused by investment in tourism. For example,
discharging of sewage along the sea front polluting the ocean and damaged the
sea life. Golf courses, constructed
partly for tourist can put sever strains on water supplies and also on land and
forests. And it requires large amount of chemical to maintain the courses which
can affect local food supply.
Eco- Tourism
In
the name of eco tourism, unscrupulous developers are building massive resorts
and there are doubts about whether local people are having any say in its
development. The environmental impacts are not considered even after research
centers were centers set up to monitor and provide effective environmental
strategies. The effects of the industry on people are absent, and mostly dealt
with climate change, global warming, acid rain, natural resource etc.
Regulation
Governments need to reconsider their
policy on tourism and be prepared to regulate the activities of tourism TNCs,
if they are trying to make sustainable development a central plank of their
overall policy. TNCs have no concern; their concern is to make profit in the
short term. Sustainability can only come if TNCs agree to safeguard local
environments and people. If the government regulates TNC, it will have a
detrimental impact on the lives of many people, though it may not be trade
worth.
Government need to ensure that their
tourism industry operates in a way that can be sustained, with fair regulation
of foreign interests, and not in manner that damages local people’s cultures
and environments. The government can regulate by;
- Consult local people (both men and women)
- Examine their planning laws and ensure that tourism assessments are completed
- Make human environment assessment (consider cost and benefit)
- Employ local engineers, project managers and other skilled labors
- Encourage indigenous tourist facilities
- Not invest in tourism to the detriment of other sectors of the economy
- Charge hotels for water use to encourage conservation
- Cooperate with other countries to exercise effective control over tourism TNCs
- Urge Western countries to pass legislation that makes it a criminal offence for their nationals to exploit children abroad under sex tourism.
Conclusion
Mainstream tourism to developing
countries is exploiting the poor and the environment, and making few economic
links with other sectors of the economy. It is not delivering what the tourist
industry claims. Regulation is needed, but there are nonetheless alternatives.
More need to be developed that are based on community participation, and on
land or sea rather than air travel. ‘It is time to stop treating tourism as a
holy cow to be protected and nurtured at all costs,’ says Anita Pleumarom, who
coordinates the Bangkok-based Tourism Investigation and Monitoring Team. Many of the developing countries need to take
extra precautions and apply regulations that will see the tourism industry
benefits more than the TNC. Responsible departments and organizations within
the developing countries should do more to protect their country’s environment,
heritage and the people while pursuing development through tourism.
Reference
John Madeley, 2008. Big Business, Poor
People: How Transnational
Corporations Damage the World’s Poor. USA. Page 127 -144
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