20
Tourism +
Lecture Development
THM1311 Introduction to Tourism and Hospitality Management
+ Chapter 6
Tourism Development
Objectives
2
The concept and principles of sustainable tourism development. The main forms of tourism development. Government and private-sector roles in tourism development. Role and types of government incentives f or tourism development and the criteria for government financial assistance. Feasibility studies & Environmental Impact Assessment.
+
3
Sustainable Tourism Development
Tourism which is developed and maintained in an area i n such a manner and at such a scale that i t remains viable over an indefinite period and does not degrade or alter the environment in which it exists to such a degree that i t prohibits the successful development and well-being of other activities and processes.
Butler, R. W. (1993)
+
4
Principles of Sustainable Tourism Development
1. 2. 3.
To improve the quality of life of the host community. To provide a high quality experience f or visitors. To maintain the quality of the environment on which host community and the visitors depend. both the
Ding, P., & Pigram, J. (1995)
+
5
Main Forms of Tourism Development
Low-impact
s
to high-impact tourism
Low impact or soft tourism developments are usually smaller scale and are designed to meet ecologically sustainable tourism development (ESTD) or alternative tourism (e.g., eco-tourism). M ass tourism (e.g., resort tourism) i s where thousands of visitors concentrate in particular areas and requires large-scale i nvestment in accommodation, infrastructure, and services.
s
+
6
Government and Private Sector Roles i n Tourism Development and Planning
s
Both the government and the private sector have to play in tourism development.
important role
s
The private sector s main role is to develop and operate tourism f acilities and services for visitors while maximizing financial returns. Today, companies accept that they have social and environmental responsibilities that they must uphold in achieving profit goals (e.g., CSR).
s
+
7
Private-Sector Roles i n Tourism Development and Planning
s
I dea generation: many project ideas emerge from the private sector itself though sponsored research studies and assessments of supply and demand relationship. Entrepreneurial role: this role embraces idea generation, development project implementation, financial risk-taking and investment, and the management of operations. Specialized technical skills: through tourism consultants, market research f irms, economists, environmental and social impact experts, architects, engineers, designers, lawyers, project managers, and builder. Financing: through its financial institutions, other corporate lenders, and i ndividual citizens.
s
s
s
+ Nonprofit Organizations (Volunteer Sector) Roles
i n Tourism Development & Planning
s
8
Operating attractions (such as pioneer villages, historic buildings, museum, and art galleries). Creating and running events and special meals. Providing travel information services. Financing the development of community-oriented facilities (such as recreation and community halls, historical and cultural centers, and trail systems).
s s s
+
9
Government Roles i n Tourism Development and Planning
s s s s
Stimulator or catalyst for development Developer Operator Regulator of tourism developments
Assure the financial needs for tourism planning = Incentives Fiscal (taxes) Direct and indirect Loans Grants Equity participation Infrastructure A ssistance Land Donations
+
10
Government Roles i n Tourism Development and Planning
s
One of the major hurdles that all tourism projects face is securing the f inancing needed for their development. The number of government agencies providing specific financial i ncentives for tourism projects has greatly increased. Fiscal incentives are special allowances for income tax or other tax purpose. (e.g., tax holidays or deferrals) Direct and indirect incentives i nclude a wide variety of programs aimed at easing the financing requirements of projects.
s
s
s
+
11
Analysis of Individual Project Development Opportunity
s
All individual tourism project development opportunities must be carefully analyzed before proceeding with construction. Projects differ in their ability to generate financial profits. - Profit-generating projects: economic feasibility studies. - Non-profit projects (no direct financial returns, travel information center or infrastructure): cost/benefit analysis or contribution analysis studies.
s
+ Before Developing something
Feasibility Study
s
12
Pre-feasibility study s Determine whether a detailed economic feasibility study is j ustified and which topics the study should address. s Because detailed economic feasibility studies are costly and time-consuming, pre-feasibility studies can be valuable to developers.
s
Detailed economic feasibility study s Determine the economic feasibility of a tourism development project opportunity
+
13
Analysis of Individual Project Development Opportunity
s s
Pre-feasibility study Detailed economic feasibility study: s Site analysis s Market analysis s Economic feasibility analysis
s s
Cost/benefit analysis Environmental Impact Analysis (EIA)
+
14
Economic Feasibility Analysis
EFA determines if a tourism development project can produce a satisfactory f inancial return for investors. EFA is composed of the following seven steps;
1) Project description: The components, scale and size, and quality level. 2) Pricing: The unit prices and rates to be charged. 3) Revenues: The market demand levels multiplied by unit price and rates. 4) Expenses and profits: The operating expenses and profits. 5) Capital cost: the capital budget for the project. 6) Cash flow: the capital expenses, net income, and cash flow. 7) ROI: The rate of return on investment.
+
15
Cost/Benefit Analysis
Economic feasibility analysis are just one aspect of cost/benefit analysis Cost/benefit analyses are useful for evaluating non-commercial tourism projects that direct revenues. Cost/benefit analyses attempt to weigh quantifiable and non-quantifiable costs and benefits tourism project against each other. generate no the of a
+
16
Environmental Impact Assessment
s Purposes of
EIA
s
To identify risks, minimize adverse impacts, and determine environmental acceptability. To achieve environmentally sound proposals through research, management, and monitoring. To manage conflict through the provision of a means for effective public participation.
s
s