LECTURE NOTES 5

SUPPLY AS AN INTERNATIONAL TOURISM DETERMINANT

1. ECONOMIC THEORYThe economic study of international tourism determinants is based on a theoretical method of analysis supported by empirical studies. For this purpose, economic theories like the theory of specialization are very effective. Four determinants, based on the theories of international trade, explain the position of a country in international tourism exchange:

1. the theory of factor endowments2. the theory of comparative costs3. the theory of absolute advantage and technology4. the theory of conditions of demand

1. The theory of factor endowments

The theory of factor endowments was formulated by Heckscher in 1919 and developed in the work of Ohlin in 1933. It influenced the fundamental analysis of international trade theories to a considerable extent. It is based on the distribution of factor endowments in each country to explain the comparative advantage which any country may have over its commercial partners.Countries with an abundance of a certain resource will benefit from a comparative advantage for the production and export of products requiring that resource.

This is also true for natural resources, which are very important for international tourism, because many tourism products use comparative advantages provided by natural resources. Therefore, the international specialization of a country will be directly linked to an abundance of the resource necessary to develop the supply of tourism products to be aimed at the international clientele. And, the abundance of these resources seems to have a decisive influence in explaining a country’s position in international tourism (Leontief).

Factor endowments are the basic components of the production of tourism products and can be divided into three categories:

a. natural resources, historic, artistic and cultural heritageb. human resources in terms of employment and skillsc. capital and infrastructure resources

a) Natural resources consist of land, space and natural features: landscape, climate, sea, rivers and lakes, flora and fauna.

The value of these resources depends on their characteristics and their accessibility. With a means of access and an organization in place to exploit them for tourism ends, natural resources become economic resources as they satisfy a demand for international tourism.

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Historic and cultural resources are equally very important to evaluate the factor endowments of a country, because they can become important motivators for international tourist visits. Those resources have an impact on tourism flows only if they are made accessible to tourists, which often means considerable investments. Endowments in cultural and artistic factors are not fixed, they can be increased with the import from other countries.

b) The role of labor is all the more important in tourism because it is a service sector which requires much manpower. Consequently, the comparative advantage of tourism firms lies in its labor resources, particularly in the skills level of their workforce.

Demography determines trends in international tourism demand and supply: population volume, percentage of active population, geographical distribution, apportionment by age band.For instance, tourism development on the French Cote d’Azur and on the Italian Riviera has not only been a consequence of the natural resources of these areas. It has also been dependent on the high demographic density available to provide a workforce. The Balearic Islands and Corsica have similar natural resources but the make-up of their population is very different. There are fewer than 200 000 inhabitants in Corsica and a large proportion of the population is retired. The Balearics, on the other hand, have more than 600 000 inhabitants and a much younger population. Therefore, the Balearics have a larger population available for employment in the tourism sector.

Also, the labor endowment of a country is defined by the skill level of its workforce, which is influenced by training needs. The availability of skilled labor has two effects:

- it influences tourism flows and their geographical distribution according to the specialization of the destination country

- it influences the mobility of workers: hotel managers trained abroad

c) Capital resources and infrastructureInternational tourism is very capital intensive and therefore capital resources are one of the most important determinants of tourism production. In this respect, tourism is similar to heavy industries. A country which has very important natural resources but limited capital will not be able to develop its international tourism sector sufficiently, because it will not be able to acquire the necessary equipment – the situation of most developing countries.

The factor endowment model advances an accurate explanation of international tourism flows. However, it does have certain limitations which cannot take into account:

- demand based on the search for “something different” which can be the result of the existence of international borders

- availability and absolute non-availability – modifies potential tourism demand because it is impossible to satisfy demand within their own country

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2. The theory of comparative costs

An analysis of comparative costs reveals that a country will specialize in producing the goods and services that can be produced at a better price than in other countries.

First expounded by David Ricardo in 1817, the theory of comparative costs explains a great number of international tourism exchanges.Even if a country is in the position of producing the entirety of goods and services it consumes at a better relative cost than other countries, it is in its interest to limit its production to goods and services which have a relatively low production cost compared to their production cost abroad. If it can acquire goods at a lower cost abroad, than it is in its financial interest to do so.

The comparative cost model adapted from Ricardo explains bilateral exchange of tourism products as a result of differences in price between two countries.

The importance of comparative costs in international tourism is increasing. There is a great diversity in tourism products. Comparing them is very difficult and often impossible. Therefore, the study of comparative costs must be oriented towards the specific attributes of international tourism. It cannot merely analyze the components of cost (transport, accommodation, associated services). It must also take into account the quality-price ratio and technological advances.

A country competes internationally by improving the quality-price ratio of its products. It generally adopts a policy of differentiating its tourism sector from that of its competitors.

a) the cost of transport b) accommodation costs – influenced by:

- the use of new technology in construction, equipment and fittings- labor cost and productivity. By using new techniques, certain

developed countries are experiencing a “return to comparative advantages” despite high labor costs and can compete again with countries with low labor costs (rapid progress of technology)

c) cost of tourism services: hospitality, catering, leisure services. d) economic policies: labor policy, price policy, credit policye) exchange rates. Variation in exchange rates has a decisive

effect on comparative cost trends in international tourism and therefore on tourism flows and distribution.

f) foreign exchange policies – the basis for international tourism policy for many countries – it allows these countries to sustain and even improve competitive tourism prices despite often high inflation rates.

3. The theory of absolute advantage and technological advance

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The theory is a development of Adam Smith’s analysis of international trade. Today it corresponds to the export monopolies of certain countries, which either arise from unique natural advantages or from technological advances (this theory explains, for instance, the export success of countries like Japan in the electronic and information technology sector)Absolute advantage plays a crucial role in international tourism. Indeed, certain countries have unique tourism resources which can be either exceptional natural sites or, more usually, architectural or artistic resources known all over the world. The man-made resources motivate tourists to visit a country and their importance in terms of international tourism factors is determined by their “uniqueness” which gives a country a monopoly or a near monopoly.

Innovation is another aspect of a differentiation policy which reinforces a country’s absolute advantage. It ensures a better long-term international specialization. Technical innovation in the tourism sector mainly involves superstructures, information and promotion, product development and marketing.Innovation can bring down costs (new materials, energy savings, electronic data transmissions, new management, reservations and payment techniques).In the most developed countries, technological progress has meant that tourists can automatically produce certain services that they used to purchase, thereby saving on labor costs (minibars, automatic services, studio hotels, hotel clubs).

2. THE TOURISM SUPPLYTourism supply comprises the natural and cultural resources, the built environment (capital and infrastructure resources – tourism facilities), the operating sectors (tourism services, tourism attractions), human resources specialized in delivering tourism services, travel trade conditions (price) and the spirit of hospitality.

Supply that materializes into actual consumption in a given framework represents tourism production.

The relationship tourism supply – tourism production has the following specificities:a) tourism production is lower or, at best, equal with tourism supply, while on the goods market, supply can, in the best case, equal production;b) tourism supply can exist independently of tourism production, while tourism production cannot be realized in the absence of supply. Goods offer cannot exist independently of production;c) the structure of tourism offer may not match the structure of production, while the structure of goods supply always reflects the structure of the corresponding production

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d) tourism supply is lasting – it exists as long as the components of the supply exists; tourism production is transient – it exists as long as there is consumption and it ends with consumption;e) tourism supply is intensive in capital goods and natural resource, while tourism production is labor-intensive;f) tourism supply can be defined quantitatively and qualitatively through its tangible components, while tourism production cannot be directly defined; its result – the tourism product has a uniqueness character – it is an artifact and can only be indirectly described;

Travel

Trade

Sector

AccommodationSector

Even

ts Se

ctor

Transportation

Sector

Ambient attractions

Recreation Sector

Food

Services

Sector

Permanent

attractions

Enter

tainm

ent

Secto

r

TourismServices

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Source: Getz, 1991, The tourism industry supply side

Tourism supply characteristics:

1. complexity- stems from the diversity of components, which means a wide array of producers and types of production- it can be classified according to various criteria. The most usual classification is based on the dominant motivation of consumers:- leisure supply – refers to sea, sand, sun tourism, spa tourism, sports tourism, adventure tourism, recreational tourism, family tourism etc.- cultural supply – refers to heritage tourism, educational tourism, festival tourism, religious tourism etc.- business supply – refers to MICE tourism (meetings, incentive, congresses and exhibitions)- health supply – refers to health tourism, wellness tourism etc.

2. specializationTourism suppliers are the producers of the different components of the tourism offer, tour operators, travel intermediaries, representatives of different enterprises or other organizations.

transport attractions catering retail Recreation & entertainment

accommodation

Ambient attractions:climatesceneryculturehospitalitywildlife

Permanent attractions:theme parksoutdoor parksfairsexhibitionsheritage sitescultural facilitycivic squares, streetsconvention centerssports facilitieseducational facilitiesshrines and sacred sites

Events:

Events at permanentattractions:touring attractionsbusiness eventssporting eventseducational eventsreligious eventspolitical eventscommunity events

Mega-Event Attractions

Regional Event Attractions

Local Events Attractions

Touring Event Attractions

Destination image and Theme

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infrastructure

- producers are highly specialized, which leads to the complex character of the offer

- the specificity of each of the components of supply makes the delivery of all tourism products by the same suppliers impossible

- the producers operate in the following areas:o accommodation and cateringo transporto attractions, entertainment and supporting serviceso creation and distribution of travel products

- tourism producers have the possibility of becoming distributors of their services or can use intermediaries

3. rigidityThe rigidity of supply relates to the fact that, in order for consumption to take place, the consumer has to move towards the supply (mode 2 – consumption abroad)

- the impossibility to store the supply leads to the difficulty in adapting the supply to the fluctuations in demand

- supply is located where attractions are (especially natural resources) – rigidity of location

- the difficulty in adapting the supply to the transformations in the structure of demand determined by changing motivations

- the rigidity of supply generates a negative impact on connected industries that are involved in creating tourism supply – longer depreciation and amortization periods, slow rhythm for renewal of production capacities.

4. substitutabilityAs a consequence of rigidity, tourism supply is substitutable – a type of supply can be replaced with another similar type that satisfies similar motivations. This implies that the functional elements of the supply can satisfy several consumption patters, without additional investment.

Tourism image

The image of a destination (supply image) is the way in which it projects itself and the way in which it is viewed by its markets (product image). Image is an overall idea; the associations which a place has; its identity; what people think about it. The image builds up over the years, it is a product of history, of cultural influences, and of myth and legend. It is also influenced by political viewpoints, by current affairs and international relationships. Some particular places or activities tend to forge a separate image from the countries where they are located. In other cases, however, it is the image of the country itself which is predominant. The image of places changes from market to market. It may not be less positive, but it differs. The image of a destination is also influenced by who else is going there and what they say about it. Leading personalities may speak well of a place or transnational companies may set up operations in a country, which can

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exercise considerable influence. If major tour operators feature it as a part of their programs, this too contributes to a positive image. Image is best built, reinforced and strengthened as a continuing process. Promotion and publicity should emphasize a destination’s most striking features and associations. Because of its importance in tourism, image is listed as a separate component in the marketing mix (product, image, price, distribution, promotion). Price, another component, is closely interrelated. It has to reflect and support the image, not undermine it.The following resumes some of the key points:

- the image may change from market to market- it is built up over time, as the result of a constant flow of messages

and stimuli- it always needs to be strengthened and maintained- it is influenced by certain major associations and ideas- it should be kept at the forefront – people have to keep writing and

talking about a place- price should be in keeping with the image

3. DETERMINANTS OF TOURISM SUPPLY

1. Territory and location as a tourism determinantLand/territory, as a basic element of the tourism offer can be analyzed from different points of view:

Descriptive approach, through an inventory of the resources and facilities (audit), as well as of tourists perceptions – a synthetic approach – TECDEV- see document named “TECDEV” on the site)

Explanatory approach – emphasizing consumption patterns, occupancy rate of the offer, tourist behavior and its causes

Predictive approach – consumption trend, development of the offer as a consequence of spatial interaction of several attractions.

Prescriptive approach – policy and planning

Tourism territory can be defined from a quantitative point of view, through calculating the carrying capacity (see 2rd course) or from a qualitative point of view, through determining its attractiveness or tourism value (TECDEV) (see document named “TECDEV” on the site)Territory, as a support of tourism supply, experiences different stages in its development (tourism area life cycle – see 5th course).

2. Tourism servicesServices related to tourism are very diverse: accommodation, catering, transport, health, safety and security, administrative, production and distribution of tourism products, entertainment and recreation.Hospitality services is the term generally associated with hotel and restaurant services.

3. Tourism superstructureTourism superstructure includes hotels, accommodation units, restaurants and the whole range of tourist installations and associated services (tourism

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infrastructure includes road network, airports, water, electricity, drainage and sewage systems and provides the basis for the superstructure).Today, the accommodations industry (also referred to as the lodging or hotel industry) and the food and beverage industry (also referred to as the catering industry) encompass a variety of facilities and are a dynamic part of the global travel and tourism industry. The accommodations industry represents a wide array of lodging facilities from luxurious resorts to modest bed and breakfast establishments. This range of facilities reflects the different needs and preferences of travelers and market dynamics. Worldwide, the number of available hotel rooms has increased rapidly to keep pace with the growth in international and domestic tourism. The food and beverage industry has also expanded as tourism has boomed. While hotels and resorts provide much of the core food service facilities for travelers, restaurants and other food service outlets also serve travelers. Food service is offered at a variety of facilities including transportation terminals, airplanes, trains, ships, and attractions. Much like the accommodations industry, the food and beverage industry is emerging in the global tourism economy through worldwide chains, providing new opportunities for the hospitality industry’s growth and expansion.

4. Prices

Price is a part of the marketing mix. It should be attractive and competitive, but in keeping with the image. It is the image that suggests a particular price/value relationship.The end price of visiting is the total cost of the trip. It will cover the cost of travel, room and board, together with the optional purchases and extras at the destination. How much people pay or commit themselves to pay before leaving are the major determinants. The government tourism authority can monitor and compare local visitor costs through a visitor price index.The foreign exchange rate has a more direct impact at the destination and determines their local purchasing power. Destinations tend to fall into price categories and this makes price a part of the image. Although price will depend on the category of accommodation chosen, the overall price range offered will differ from destination to destination. Price levels can also convey the idea of relative exclusivity.Any tour operator’s catalogue will reveal the more expansive destinations as opposed to the cheaper ones. It is easy to see how each destination is positioning itself in relation to the others.In price setting there are many cost considerations. In general, for example, the more distant a destination, the higher the air transport cost as a proportion of total cost. Price may support the image, but it can also undermine it.

5. The role of the state. Tourism policy and planning.

Tourism, like other forms of economic activity, takes place in an environment that is shaped by many different forces. One of the most important of these

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forces–if not the most important–is exerted by a complex web of policies, laws, regulations, and other actions of governments.

Government Involvement in TourismTo illustrate the importance of the public sector to tourism, consider a hypothetical dream vacation an avid skier might take to a foreign country called Alpina, home to the world’s greatest ski slopes.First of all, can the skier visit Alpina? The answer depends on Alpina’s policy regarding foreign visitors to its country, and on the skier’s own government’s policy regarding travel to Alpina. The answer also depends on the status of political and trade relations between the skier’s home country and Alpina. Perhaps the two are not on the best of terms, in which case a lengthy and extensive process may delay the trip.How will the skier get to Alpina? Ideally, she would board a plane and fly directly to the airport nearest to the hotel she will be staying at. But the availability of such flights would depend on the status of bilateral air agreements that the two countries may or may not have with each other. If the two countries do not have an agreement, she may need to fly to a third country first before boarding a plane destined for Alpina.Once there, where will the skier lodge and visit? She may have heard of several outstanding ski areas. Perhaps, however, the local or national government has been advised that these areas are being overused, and has therefore designated them as ecological preserves and will not allow any further skiing. Or perhaps the hotel at which the skier is staying is quite distant from the best ski areas, because the local government, for political reasons, has compelled developers to build hotels in areas that need jobs rather than those in proximity to the ski slopes. During her stay, our skier will have paid many direct and indirect taxes in the hotel, stores, slopes, and transportation that are also the prerogatives of governments at various levels.From this hypothetical example, one can see that the actions or inactions of government can have a great impact upon nearly every aspect of tourism. Tourism-related laws, regulations, and restrictions range from the broad and inclusive such as air traffic agreements that dictate the frequency and cost of airline trips, to the minute such as a local law that specifies the amount of indigenous material that an “authentic” souvenir needs to contain in order to be labeled as such.Governments are extensively involved in all travel experiences, even if the effects of their involvement may not be immediately apparent.

1. Reasons for Government Involvement in Tourism and the EconomyGovernment intervention in a country’s economy has traditionally been thought to be a characteristic of command economies, in which the private sector is largely preempted by government-owned institutions and businesses. On the other hand, market economies, by definition, are supposed to be freer of government involvement. While significant differences in the levels of government intervention exist among countries, all governments, even those in nations characterized by relatively unfettered market economies, are deeply involved in their economies for a number of reasons.

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a) Promoting Economic DevelopmentIn today’s global economy, the tie between government and economic vitality is a direct and essential one. Very few countries can pursue economic development without participating in the global economy.This participation involves issues such as currency exchange, foreign ownership, and consular relations. Thus development is highly dependent upon political and governmental actions. The result of this interdependence is that political decisions can have a ripple effect throughout the entire national economy. Economic development often requires government initiative and capital. This is particularly important for the development of new regions or areas that require infrastructure. For example, foreign investors might be reluctant to finance a resort project unless the government demonstrates its commitment to the project by building or financing the necessary access roads and water lines, or by offering appropriate incentives such as a tax holiday during the early years when the resort is not expected to be profitable.Monetary policy is another important area of government involvement. Governments often use their ability to expand or contract the supply of money to stimulate or control economic growth. Governments also use a variety of methods to influence the value of their currency on the international market. Currency exchange rates among nations are particularly important to international trade and tourism. For example, if country A’s currency is inexpensive relative to country B’s, then visitors to country A from country B will likely increase their expenditures while in country A.

b) Facilitating and Supporting IndustriesClosely related to overall economic development is the practice on the part of governments to support certain industries. Governments take different approaches to supporting sectors or industries. Some governments take a very activist approach to shaping their economies by creating industrial policies, which constitute integrated plans of action that can be quite detailed in setting goals and limits for a nation’s industries. Governments that want to avoid the degree of planning and control that an industrial policy requires often utilize various incentives and disincentives. Tax credits, for example, are often used to encourage investment in and development of certain industries that a government favors.

c) Raising RevenuesMuch of government intervention in the economy results from its need to generate the revenue to maintain its agencies and activities. Government operating expenses related to tourism include the costs to maintain the various departments responsible for tourism functions. Revenue-raising measures can be highly visible to the ordinary citizen, like the taxation of personal consumption and business income or the assessment of fees to obtain permits and licenses, or in more specialized forms as in the sale of bonds and other instruments of public finance. Taxation, however, is less apparent to tourists who have no vote on the matter or in local politics, and thus often becomes a source of choice for raising new revenues.

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d) Creating a Stable Business EnvironmentGovernments have a vested interest in ensuring that certain standards of competence and conduct prevail in the marketplace. This is because governments are often drawn into, and are asked to resolve, problems and disputes that arise from economic activity. In order to set up these standards, governments establish regulatory agencies and laws. For example,. a government may enact a law that defines the phrase “made from indigenous materials,” to ensure that visitors who are sold such items are not being deceived. To protect home industries and to encourage the consumption of local commodities, government may also attempt to impose high import taxes to discourage the purchase of foreign goods to resell in hotels, restaurants and other tourism-related businesses.

e) Pursuing Other Policy GoalsGovernments can use their power to intervene in business activity to achieve broader policy goals. Some of the policy areas that governments often address when considering tourism development include employment, human resources development, education and training and environmental protection. Social equity and justice are important goals of some government intervention; where inequitable distributions of wealth are being created or conserved by structural problems in the economy, corrective government action is sometimes warranted.While these incentives and pressures integrally involve governments in their economies, public policy is not the sole determinant of a country’s economic direction. Other factors, such as a country’s climate and its natural resources, cultural and social factors, and the condition of the regional and world economies, also direct and constrain economic development in certain ways. Nevertheless, in today’s global business environment it is clear that public policy exerts a significant influence on the shape and vitality of a country’s economy.

2. Roles of the Public Sector in TourismIn order to better understand how government involvement affects the tourism industry, we can classify public sector actions into four general categories: policy, planning, development, and regulation. In each of these areas governments play a unique and vital role in either facilitating or discouraging tourism.

a) PolicyTourism policy can be defined as follows:A set of regulations, rules, guidelines, directives, and development/ promotion objectives and strategies that provide a framework within which the collective and individual decisions directly affecting tourism development and the daily activities within a destination are taken.Policy generally refers to an overall, high-level plan that includes goals and procedures. Public policy, therefore, takes into account the desired end results of a government and the methods for attaining those results.

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For example, a government might pursue a policy of greater economic growth through tourism development by creating generous tax incentives for resort developers. Policy is meant to provide guidance by addressing the issues that are central to any effort to develop and sustain a tourism industry. Policies embody goals and strategies that a government has adopted with respect to tourism, economic development, employment, political relations, or, more likely, a combination of these and other areas.Policies are generally found in formal statements, such as laws and official documents and speeches. However, policies can also be informal and unstated, and can be discerned from patterns or trends of governmental actions. For example, a government jurisdiction that consistently disapproves every application to build a hotel within its borders, but does not possess any formal statement on hotel development, may nevertheless be guided by a clear policy. In this respect, it is important to note that policy can be evident as much from government inaction as its actions.Tourism policy is generally considered to be an area within a nation’s overall economic policy. Economic policy is concerned with the structure and growth of a nation’s economy and is often articulated in ten-year plans that project conditions in the coming decade and plan the nation’s economic growth within those conditions. Some of the key areas of concern in economic policy are labor force, investment and finance, important industries, and trade.It is important to understand that a nation’s various policy areas are interrelated, reflecting the complex and dynamic nature of modern society itself. Impacts in one policy area will likely effect changes in other areas. Thus, tourism policy makers need to adopt a comprehensive perspective and consider all of the possible impacts and relationships that tourism will have with other areas of society.The formulation of tourism policy, therefore, is a crucial responsibility of a government that wishes to develop or sustain tourism as an integral part of its economy. Tourism policy articulates goals and direction, strategies and objectives, and by so doing enables the government to lead and actively pursue the kind of development its people want.Tourism policy thus requires that policy makers – legislators, administrators, business executives – to consider the following issues:• The role of tourism in the economy. (How important is tourism to the overall economy? How important is tourism with respect to other industries?)• Control of tourism development. (What kind of tourism development is desirable and appropriate? Where should tourism development occur?)• Administration of tourism. (At what level should tourism be represented in the government’s organizational structure?)• Government support for tourism. (What amount of public resources should be directed to tourism’s support and growth?)• Tourism’s impacts. (What kinds of impacts, both positive and negative, will tourism have on the existing society, culture, and environment, and how will these be addressed?)

Areas Addressed by Tourism Policy:

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1. The roles of tourism within the overall socio-economic development of the destination region

2. The type of destination that will most effectively fulfill the desired roles3. Taxation – types and levels 4. Financing for the tourism sector – sources and terms5. The nature and direction of product development

and maintenance6. Transportation access and infrastructure7. Regulatory practices (e.g. airlines, travel agencies)8. Environmental practices and restrictions9. Industry image, credibility10. Community relationships11. Human resources and labor supply12. Union and labor legislation13. Technology14. Marketing practices15. Foreign travel rules

The Structure and Composition of Tourism Policy

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Destination Vision Framework

b) PlanningPlanning is particularly important for tourism development because of two characteristics of the tourism industry. First, tourism is a complex industry that stretches across many different sectors and businesses; therefore, it is an industry which is often not formally recognized in statistical analyses of the economy. As a result, hard data and information about tourism tend to be fragmented among different subject areas.Complicating the first characteristic is the fact that tourism is a site specific industry. Two destinations may be comparable in terms of size and visitor market, but because of their unique circumstances–including the physical environment, availability of services, government and culture–their industries may take vastly different forms. Each destination will have different problems, or will need to address similar problems in different ways. Because

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mass tourism is a relatively young industry, even destinations that are considered established may be only 30-40 years old, and are still learning from their own experiences. In turn, newer destinations are trying to learn from the mistakes of others.Planning enables government and industry to compensate for these factors by providing a structure to collect and analyze information relevant to tourism development and a process to achieve it.

Planning approaches

Planning is organizing the future to achieve certain objectives. It provides a guide for decision-making on appropriate future actions. Planning for tourism is aimed at bringing certain socio-economic benefits to society while maintaining sustainability of the tourism sector. Planning is prepared within a time framework and must apply a flexible, comprehensive, integrated, environmental and sustainable, community-based and implementable approach.Tourism planning may be incorporated into the general planning for an area and, if this can be accomplished, tourism will automatically be integrated into the area's development patterns. However, the more typical situation is that the tourism plan is prepared separately because it is needed to guide development as soon as possible after the decision has been made to develop tourism, or to improve and expand existing tourism development.Plans are usually prepared for a specified time period so that there is a time framework for establishing development targets and monitoring the progress of tourism. Typically, plans will be prepared for a long-term period of about 15 years, but this can range from 10 to 20 years. The end of the planning period is termed the horizon year of the plan. Within the long-term time planning period, recommendations are made for development projects and actions that should be carried out during the short- or near-term period of the first five years of the plan. Some local authorities may consider the short-term period to be only two to three years. Recommendations may also be made for the medium-term period of five to ten years.

Levels of tourism planning and development

Tourism planning is carried out at various levels, from the macro or more general level to the local or more detailed level. Each level is focused on particular considerations. Ideally, the macro or more general levels are prepared first and the local level planned within the framework of the more general levels. These levels are described as follows:

International levelConcerned with international transportation services, tour programming that includes more than one country, joint product development such as the Silk Road, the Mayan Route and the Slave Route Project and sometimes joint tourism marketing.

National level

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Concerned with national tourism policy, structure planning, international access to the country and the major transportation network within the country, major tourist attractions, major tour programs, setting national level facility and service standards, establishing standards for and sometimes developing tourism education and training institutes, investment policies, and marketing of tourism and providing information services for the entire country.The term “master plan” or “comprehensive master plan” has been used extensively in reference to tourism planning. In general, it defines a strategic plan that integrates all aspects of tourism development, including human resources, environmental impacts, and social and cultural impacts. The master plan considers the long term implications of decisions and their risk and return to a community or destination.Depending on the nature of the tourism master plan, whether it is one intended for tourism development in general or whether it is one whose purpose is more specific (such as to guide the physical development of a new resort area), the topics and levels of research will vary widely. All master plans are designed to cover the span of a development period (e.g., a five-year plan, a ten-year plan or other time frame) or an investment period when land acquisition, construction, operation and financing are laid out as critical points for guiding decisions at each step.

Regional levelOften done for states or provinces, the regional level is concerned with regional tourism policy and structure planning, regional tour programs, regional access and transportation network, sometimes establishing facility and service standards, sometimes setting regional investment policies and handling regional tourism marketing. Initiating and coordinating education and training programs in tourism may be an important function at the regional level.

Local or community levelThis level includes tourism planning for local areas of sub-regions, cities, towns, villages, resorts, rural areas and some tourist attraction features.The local or community level of tourism planning is concerned with comprehensive tourism area plans, urban tourism plans, and land use planning for resorts and other tourist facility and attraction areas. Special tourism programs such as ecotourism and village and rural tourism are carried out at the local level. There may be some education and training for tourism at the local level, some tourism marketing and provision of information services and other management functions.

Site planning levelSite planning refers to planning the specific location of buildings and structures, recreation facilities, conservation and landscape areas, parking and other facilities on the development site. Site planning is carried out at the local level based on the land use plan.

Architectural, landscaping and engineering design level

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This is the most detailed level and specifies the precise design of buildings, structures, landscaping, other development on the site and the building and infrastructure engineering. Architectural, landscaping, and engineering design is carried out at the local level based on the site plan.

Tourism planning and development must be integrated among all these levels so that the local development policies and planning reflect the regional level, the regional level reflects the national level and the national level reflects international policies and programs. However, each level must take initiative in developing its tourism sector.In addition to comprehensive tourism plans, there can be special studies on certain aspects of tourism. These studies may include, for example, environmental, socio-cultural and economic impact analyses, marketing studies, developing specialized types of tourism such as marine tourism, youth tourism and health tourism, product improvement studies, improving handicrafts, developing conference tourism, etc.

Tourism planning process

Tourism planning must be carried out according to a systematic process in order to be effective. The planning process varies somewhat depending on the type of planning and local conditions, but it generally follows these steps:

1. Study Preparation2. Determination of Development Objectives3. Surveys and Evaluations4. Analysis and Synthesis5. Policy and Plan Formulation6. Recommendations7. Implementation and Management

The steps in the planning process are explained below.

1. Study preparationThe pre-feasibility study (evaluation of resources) is completed and, if the evaluation is positive, the decision is made by the local authorities to proceed with tourism planning. Next the terms of reference (TOR) of the planning study project are prepared. Then the project team is selected. For a comprehensive study, a multi-disciplinary team is required that includes specialists on physical planning, marketing, economic and financial analysis, environmental and socio-cultural considerations and infrastructure planning. Depending on the type of tourism area, other specialists may be needed such as on mountain trekking and marine sports.

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2. Determination of tourism development objectivesThe objectives state what is expected to be achieved through tourism development. Objectives typically combine and balance economic, environmental and socio-cultural factors and should always include the concept of sustainability. These are determined in a preliminary manner at the start of the project and later refined based on feedback during the planning process. The objectives should be determined in close coordination with community residents and their leaders, as well as the government authorities.

3. Surveys and evaluationsSurveys are conducted and evaluations made of the many elements related to tourism in the area.

The following figure is a Model Tourism Resource Survey Form that can be used for description and evaluation of specific resource features.

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4. Analysis and synthesisAll the elements surveyed are analyzed in an integrated and comprehensive manner (planning synthesis) to understand their inter-relationships. It is important to carefully analyze tourist markets in relation to the types of attractions and activities that can be available for tourists and other

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components of the tourism product. Instead of projecting tourist arrivals, which is difficult if there is little or no existing tourism in the area, the approach is used of establishing market targets. These targets indicate the number and types of tourists that can be attracted to the area if the recommendations of the tourism plan, such as improvements to attractions, facilities, services, transportation and other infrastructure and promotional programs, are implemented. A basic environmental planning technique is carrying capacity analysis.This is not a precise tool but provides a very useful guideline to determine the optimum level of development and use of attraction features, facilities and services. At this stage in the planning process, it is useful to summarize the major opportunities and constraints for developing tourism. This provides the basis for focusing recommendations on taking advantage of development opportunities and resolving or mitigating the development constraints. SWOT analysis is sometimes an effective technique to summarize major opportunities and constraints, especially in strategic planning. In analyzing an area's potential for tourism development, SWOT refers to identification of:• Strengths• Weaknesses• Opportunities• ThreatsThe factors identified under each of these categories are expressed in a series of short statements which can then be easily compared to make a summary analysis of the area's potential for developing tourism. They also provide the basis for formulating the priority recommendations for development.

5. Policy and plan formulationBased on the objectives, surveys, analysis and synthesis, the tourism development policy is formulated and the tourism physical plan is prepared.Typically, alternative plans are prepared and evaluated as a basis for selecting the final plan that optimizes benefits and minimizes problems.Sometimes, parts of different alternative plans are combined to determine the optimum final plan. An essential consideration in evaluating alternative plans are environmental and socio-cultural impacts, with the plan selected that will likely result in the least negative impacts.

6. Recommendations on the plan elementsRecommendations are made on improvements needed to tourist attractions, existing tourist facilities and services, institutional and other elements of the plan. Development and design standards for tourist facilities are recommended. Environmental and socio-cultural impacts are analyzed and protection measures recommended, and the economic impact of tourism is analyzed and ways recommended to enhance economic benefits.

7. Implementation and managementPlans have little value unless they are capable of being implemented, and are actually implemented. Techniques of implementation should be considered throughout the planning process and specific implementation techniques

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identified in the planning program. These techniques include development programming, applying tourist facility standards, zoning regulations, financial mechanisms and other means

Elements of a Tourism Plan

Destination planning can vary from one project to another, due to factors such as:

- the type of destination being developed, - its current level of development, - the theory or style of planning being used.

Regardless of the exact planning style adopted, a destination plan will generally include analysis of the following areas: tourism demand, tourism supply, tourism impacts, economic and financial issues, and an action plan.

1. Demand AnalysisDemand analysis examines the existing and intended visitor markets of the destination. It also includes regional and global travel patterns and trends, since these will also affect the ability and willingness of people to visit the destination. The basic premise of demand analysis is that the destination must be planned with the visitor in mind, and that it is no longer prudent to follow a supplier mentally, which takes a “build it and they will come” approach.

Market AnalysisIncreasing competition among destinations requires knowledge of changing trends in the visitor market. A destination that offers sun, sea, and surf now has a multitude of competitors, as do other types of destinations. Differentiating one tourism destination from another requires greater and more sophisticated marketing information and techniques to ensure a proper “fit” between what is offered and what visitors want. Market analysis is therefore crucial for planners and developers. Two key components of a market analysis include:- Tourist arrivals and characteristics, including information on a visitor’s place of origin, demographic and socioeconomic profile, travel itinerary, purpose of visit, length of stay, and spending patterns. - Travel patterns and trends, which should place the destination and its visitor profile within the context of general travel patterns and trends. An assessment of the broad market includes historical travel patterns, recent growth markets, and changes in the industry that may have a significant impact (such as recent technological innovations which have affected how travelers make their reservations).

2. Supply AnalysisSupply analysis examines the destination itself–its attractions, accommodations, and facilities. The goal of a supply analysis is to have a

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complete understanding of what visitors will be presented with from the moment they enter the destination area. Most importantly, this will involve a close look at what the destination intends to market as its attractions. In addition, however, it will also be necessary to examine areas such as transportation networks, infrastructure, and manpower, since these have a direct and large impact on the quality of the visitor experience. Supply analysis can also include a discussion of the business and political-legal environment of the destination area.

Site SelectionIf the purpose of the destination plan is to guide new development in an undeveloped area, a supply analysis would be oriented to the planned, rather than the existing, tourism product. Thus, rather than an assessment of existing hotel accommodations (which may be limited or nonexistent), such an analysis might look at various locations for the proposed hotels and commercial buildings. The following are criteria used to assess potential integrated hotel resorts:- Proximity of the site to tourist attraction features.- Desirability of the site’s micro-climate.- Attractiveness of the physical environment of the site.- Availability of land that can be feasibly developed.- Access to major tourist gateways and regional attractions.- Adequate transportation and utilities infrastructure.- Absence of environmentally vulnerable areas at the site.- Receptivity and feelings of the resident population to the industry.- Availability of a local work force and sufficient housing.

Inventory of Existing AttractionsAn attraction can be defined as a facility or location that is “planned and managed for visitor interest, activity, and enjoyment” (Gunn, 1994, p. 58). The purpose of this element is to make a comprehensive list of all of the attractions that the destination currently offers its visitors.The inventory would examine the types of attractions, their location and accessibility, their condition, and any other aspects that might be relevant to visitors. Attractions can be organized in a number of different ways, including ownership (public vs. private) and the type of visitor the attraction appeals to.

Inventory of Facilities, Services and InfrastructureAlthough tourists are generally not attracted to a destination by its supporting facilities and services, they are nevertheless crucial to the overall quality of the visitor experience. The inventory notes specific details about support facilities and services, such as the number and location of places to make currency exchanges, in order to provide planners and developers with a complete picture of the destination’s current capabilities. The quality and scale of support facilities and services is closely related to projections of the destination’s capacity, or maximum volume of visitors its facilities and infrastructure can handle. Capacity problems often occur where the development of accommodations outpaces transportation and infrastructure improvements.

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With detailed information from the inventory, planners can avoid such problems by properly scheduling development phases.Major components of an inventory include:- Tourist facilities and services. These include entry and exit facilities and services such as airports, baggage handling, customs, and check-in procedures, the availability and quality of accommodations, dining, entertainment and shopping amenities and the destination’s ability to provide for the safety and security of its visitors, including the availability of medical facilities.- Infrastructure. These are the facilities generally owned by the government or utility company that support tourism development and activities. There are two important characteristics of infrastructure: first, they tend to be large and capital-intensive, and second, they support both the visitor and resident communities. Because of these two factors infrastructure development raises difficult questions, one of which is how to allocate the cost of an infrastructure project between public and private funds. Elements that are generally covered in an analysis of infrastructure include facilities and services such as airports, harbors, roads, public transportation, water supply, power, sewage, solid waste disposal, and telecommunications.

Business and Legal EnvironmentThe business and legal environment of a destination can have a significant impact on the development process. For this reason, there is a discussion of topics such as the existing structure of government, the existence and functions of any government tourism organizations, and current laws, policies, and regulations as they apply to tourism, development, and investment. In many destinations, a basic issue is the existing system of property rights. Can foreign entities own property? If not, how will ownership and control issues be addressed? From the private sector’s perspective, an important factor is the process by which a developer obtains all the necessary approvals and permits to start construction, and the approval process for businesses to start operations.Local politics can be a major factor in these permitting processes. Finally, the tax laws of the destination will have an impact on the financial aspects of the project. For example, many destinations place a higher tax burden on visitors by imposing hotel taxes and other types of additional fees.

3. Tourism Impact AnalysisAnticipating the impacts of development is one of the most crucial functions of a tourism plan. An assessment of the environmental impacts of development has become a standard and, in many places, required part of the planning process. Equally important is a consideration of the socio-cultural impacts of the development. These impacts are more difficult to anticipate and quantify, but the experience of many destinations has shown that the effects of tourism on a society’s culture and people play a vital role in its success.For many countries and areas, tourism constitutes one of the most environmentally friendly industries that can be realistically achieved.

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Tourism does not require the kinds of activities that have traditionally been associated with environmental degradation, such as large-scale excavation (mining and extraction), release of pollutants into the water and air (refining, manufacturing), or the use of pesticides and herbicides (agriculture). Like much of the service sector it is normally considered a part of, tourism is a relatively “clean” industry in terms of its environmental impacts.Nevertheless, tourism has definite and measurable impacts. These impacts are perhaps even more significant when one considers that much of tourism’s appeal relies on the quality of the environment itself.The goal of sustainable development demands that destinations place a high priority on the environment.There has also been a trend toward expanding the definition of what constitutes an environmental impact. The following list reflects the areas covered in an environmental impact statement for a proposed convention center development:- Project description: physical characteristics; estimated cost; construction schedule.- Physical environment impacts: region; climate; existing land uses; project site; geology and topography; soils; flooding; water quality; hazardous materials and waste; botanical resources; terrestrial fauna; archaeological, cultural, and historic resources; air quality; noise; radio frequency interference; scenic and visual resources.- Socioeconomic impacts: social impacts; employment; economic and fiscal impacts.- Infrastructure and public facilities: traffic and transportation; wastewater; water supply; drainage; electrical power and communication; solid waste; police protection; fire protection; emergency services; education and child care; recreational resources; health care facilities.- Conformance with existing plans, policies, and controls: state level; county level; environmental regulations.- Alternatives to the proposed development.- Long-range and unresolved issues: irreversible resource commitments; long-term productivity; unavoidable adverse environmental affects

Environmental assessments of this type require the services of many specialized consultants and professionals, including archaeologists and soils engineers, and highly specialized tests, such as traffic modeling and noise impact studies.With regard to the issue of the industry’s socio-cultural impacts, the pressures and changes that tourism brings to bear upon population groups that have remained outside of the modern market economy can be significant. Again, as in the case of the environment, these pressures and changes become all the more important in light of the fact that a particular destination may base its appeal on the local population and its culture.The socio-cultural impacts assessment begins with the collection of demographic data (birth and death rates, age profile, marriage patterns, family size), economic data (personal incomes, source of incomes, household sizes), health data (disease rates, life expectancy), social indicators (crime statistics, educational levels), and cultural beliefs and practices. Based on this data, the plan can address issues such as the following:

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- To what extent is the society dependent upon a more traditional economy (e.g., barter) rather than a cash-based market economy?- How will existing family structures and patterns fit with the possible employment of family members? This issue has proven to be particularly important in traditional patriarchal societies where women have entered the work force for the first time, and develop a social and economic network outside of the family.- How do the residents feel about the uses to which the land will be put (in particular, the construction of accommodations and commercial facilities)? Will the construction alter their access or use of shoreline and other areas?- How do residents feel about performing cultural practices before foreigners? About selling traditional artifacts and wares?- Is the local society relatively egalitarian, or are there clear divisions among various strata? How might this affect their willingness and ability to work in service-related positions?- How might the availability and use of consumer goods affect the local society? How might they react to visitors whose consumption patterns reflect a much higher standard of living?In recent years, the issues related to environmental and socioeconomic impacts have become more pressing as more destinations turn to ecotourism. Ecotourism is intended to give the visitor a closer and more authentic experience of the destination. In so doing, however, it also places both visitor and the local environment and culture in much closer contact. In some cases, this has worked to the detriment of the local society, which by its openness to the visitor is now more vulnerable. The market for ecotourism continues to grow, however, and thus these impacts will continue to be important for both visitors and local societies to consider.

4. Economic and Financial AnalysisTourism development must be financially feasible for both the host area’s government and the private sector in order for it to provide any economic benefits to the host community. Of particular concern to the government will be the extent to which the development will provide economic benefits, such as an increased standard of living and higher employment, to the host area.For most destinations, the prospect of greater economic activity and strength is the first and primary reason for tourism development.Ideally, every dollar of visitor expenditures will be retained and extend throughout the local economy, creating spending, jobs, and wealth. In order to devise strategies to facilitate this outcome, the economic and financial aspects of the development, grounded in the information on demand and supply, is assessed.From the government’s perspective the industry’s ability to generate increased economic benefits for the local community is of central importance. Some of the questions that are important to the public sector in an economic and financial analysis include:- What kind (in terms of socioeconomic level) of visitor is tourism likely to attract?- What are the spending habits of this type of visitor?

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- Are there products and services that this visitor values and purchases? If not, will they need to be imported? What will be the likely cost of such imports?- Does the work force have the requisite skills and training to supply the industry with labor? How much will education and training cost?Will there be a need to import certain segments of the labor force?If so, what kinds of costs will be associated with that?From the private sector’s standpoint, the risk and profitability of a project need to be carefully projected. Examples of questions that are important to the private sector are:- Are there sufficient local sources of capital for the planned projects?- Are there restrictions on foreign ownership or control of land? Will these restrictions affect the ability to obtain financing?- What are the prevailing wage rates of the local population? Is there a pool of managerial-level workers that can staff the facilities?The funding requirements for destination development are usually addressed carefully in the planning process. Although government is often responsible for funding items such as infrastructure and education and training, while the private sector funds accommodations and other facilities, the actual funding will vary with the circumstances of each project. Less-developed areas with limited access to both public and private capital can apply for assistance from various regional and international organizations, such as the Asian Development Bank and the World Bank. These types of organizations also provide funding for the planning process itself.

5. Action Plan and RecommendationsThe action plan is the culmination of the planning process and will vary with the goals of the plan itself. The goal of this section is to synthesize all of the data and analysis into a viable plan of action for the various parties involved in the development. This section of the plan can include strategies, guidelines, recommendations, schedules, and even legislation and other formal documents. Often, the action plan will include a combination of some or all of these products.An example of an element that might be included in this section is a graph that represents a time-specific action plan, with details on the sequencing and timing of objectives. Another example would be development and design standards, or even model legislation, which a government could use to control the development of the destination area and covering areas such as building density, building height, building setbacks from property boundaries, shorelines, and roads, the allowable floor area ratio of buildings, the allowable building footprint or site coverage, parking requirements, and other requirements in areas such as landscaping (WTO, 1994e, p. 52).These types of development guidelines are important for undeveloped areas, many of which do not have zoning codes in place during the planning process. In this way, a plan can have an impact beyond its own project area and assist a destination area’s government in ensuring that the groundwork for tourism development is laid.

Resort planning

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Resorts are integrated and relatively self-contained tourist destinations that provide a variety of facilities and activities for tourists. There are many types of resorts: beach and marine, mountain, health, recreation, and resorts serving important nature, archaeological and historic sites.They can vary in size from having many hotels with a wide variety of facilities to a single large hotel with some variety of facilities or a small 'retreat' hotel in remote areas. Resort towns are existing communities which have developed a concentration of tourist facilities and activities and are related to major attractions. An important trend in resort development is the provision of a wide variety of recreational, shopping, cultural, health and other facilities. Conference and meeting facilities are often developed in resorts. Many resorts in some countries now include self-catering accommodation and vacation and retirement homes. In addition to providing their own attractions and activities, resorts often serve as a base for tourists to tour nearby areas.Resort planning should be carried out according to a systematic approach and process as shown in the figure below.

If there is not a regional or area-wide plan that designates the resort site, the complete planning process should be followed.

First, a market and product assessment, especially of the tourist attractions in the area, is carried out.

Then the resort development objectives, type and size are determined in preliminary form;

The site selected, conceptual planning and a pre-feasibility analysis is conducted.

If the results of this analysis are positive, there is a more precise determination of the facility and land use requirements and infrastructure needs; The regional relationships are analyzed, including access to the site

and relationships to towns and attractions in the area; Then the environmental and carrying capacity analysis is prepared.

There is a feedback between the carrying capacity and amount of facilities, such as number of hotel rooms, to ensure that the site capacity is not exceeded.

Relationships to local communities are analyzed. Based on these analyses, the detailed resort land use plan is prepared

and regional and community relationships specified. A specific environmental and socio-cultural impact assessment is

conducted of the resort plan to ensure that no serious environmental or socio-cultural problems will be generated by the resort. If there are likely to be such problems, the resort plan will need to be modified to prevent the problems.

A final economic and financial analysis is carried out to make certain that the resort will be economically viable and produce an acceptable rate of return.

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In a medium to large-scale resort, development may take place over a long period of time and logical phasing of development should be shown on the plan. Typically, the first phase is planned in detail and later phases are more generally planned. When the later phases are ready for development, which is usually dependent on the market conditions at that time, they can be planned in detail taking into account circumstances prevailing then, such as new tourism trends or new transportation facilities, etc.

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If there are existing nearby villages where resort employees can live, any improvements needed in these villages should be included in the planning program. If there are no nearby communities, then a new community may need to be developed for resort employees and their families or, in a small resort, a housing area provided for employees.Employee communities should include, in addition to housing, community facilities and services such as schools, medical clinics and parks and recreation facilities and adequate infrastructure.When all aspects of the resort planning are considered satisfactory, an implementation program is prepared, development organizational structures are determined, financing is found for development and construction is commenced. Continuous effective management of the resort is essential in order to maintain its quality and respond to changing market and product trends. There is a tendency for successful resorts to become overdeveloped because they have been successful. Overdevelopment can lead to environmental problems and decline of the resort's popularity.The best approach is to establish a maximum size for each resort based on its carrying capacity and maintaining high quality standards.When one resort in an area is fully developed, new resorts can be developed elsewhere in the area or, in some cases, existing older resorts rehabilitated and revitalizedProper location of the resort is important and resort sites should be selected according to logical criteria. These criteria will vary from one place to another but successful resort sites generally should have the following attributes: • Located at or near a tourist attraction feature such as a beach, marine area, lake, ski slope, hiking or trekking area, mineral springs (for a health resort) or major archaeological or historic site. The resort development, however, should not impinge on the feature but be set away from it.• Desirable micro-climatic conditions as related to the type of development.• Attractive physical environment of the site and nearby area, or possibility of making the site attractive through, for example, interesting landscaping. Sufficient amount of available and developable land that does not have a more important economic or conservation use.• Good existing or potential access from the tourist gateway to the region or area.• Existing availability of, or feasibility of developing, adequate infrastructure of water supply, electric power, waste management and telecommunications.• No serious air or water pollution of the site and compatible nearby land uses, and limited possibility of the resort development itself generating serious environmental or social problems if it is well planned.• Availability of a nearby labor supply to work in the resort, or the possibility of encouraging in-migration of the labor needed which might require development of a new community.There may be additional criteria depending on the local circumstances.No single site may meet all of the criteria. But the site should meet several of the criteria with the possibility that any problems with other criteria can be resolved in the process of development.

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Meetings should be held with local communities and their leaders to explain the concepts of tourism and resorts so that they can express their views on the resort proposal and commence thinking about how they can participate in and benefit from the resort development. As indicated previously, the resort plan and development program should include ways to involve the local communities.In preparing the resort plan, the general principles to be followed should include the following: • Plan for a variety of recreation, nature-oriented, cultural and shopping facilities and activities within the resort and in the nearby region.Resorts now commonly include meeting and conference facilities which expand their tourist markets.• Give the resort a distinct sense of place and character. Often the resort environment should be considered like a park in which some buildings are located.• Plan the resort environmentally and for sustainable development with application of carrying capacity analysis.• Establish close linkages between the resort and local communities, with these communities receiving benefits from the resorts, and to the regional context.

Some more specific principles, related mostly to land use planning and design are:• Provide for good local and regional access to the resort.• Conserve any existing important environmental, archaeological and historic sites on or near to the site and integrate these into the resort environment and effectively interpret the sites so that they will be appreciated by visitors.• Group resort facilities and activity areas according to their functions.• Maintain view planes and corridors so that the resort facilities are visually related to the major attractions of the environment such as coastal, water and mountain features.• Properly relate the major accommodation areas to the major resort features, but do not impinge on these features.• Provide for a centrally located and conveniently accessible resort centre (in a large resort) where there is a concentration of commercial and cultural facilities.• Provide for a convenient, interesting but not high-speed resort transportation network. Use non-polluting public transport facilities where feasible, such as battery-powered shuttle buses and carts.• Allow for general public access for local residents to the resort features, including its beaches if any, but also maintain public safety standards. Often public parks are now included in resorts. If residents can use their amenity features, they will not resent tourism and support its development.• Plan for adequate infrastructure of hygienic water supply, electric power, waste management and telecommunications. Proper waste management is essential to prevent pollution problems.• Provide for adequate housing and community facilities and services, whether these are existing or new communities, for the resort employees and their families if these are not already available in the area.

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• Establish and apply suitable development standards for the resort facilities such as maximum building densities and height limits, minimum setbacks of buildings especially from the coastline, and adequate amounts of areas for landscaping and conservation features.• Ensure appropriate architectural design of hotels and other facilities, generous and attractive landscaping and proper engineering standards of buildings and infrastructure.• Plan the areas adjacent and near to the resort to ensure that they will be compatible with and complement the resort, and do not develop in an uncontrolled manner. It is often desirable to establish a green space zone around the resort.• Provide for the safety of tourists, for example, providing life guards in beach resorts, ski and trail patrols in mountain resorts, ensuring that boats and other tourist vehicles meet safety standards, and incorporating basic medical emergency services in the resort development. For isolated resorts, it may be important to provide for emergency medical evacuation services.As indicated above, provision of adequate infrastructure for the resort is essential to prevent environmental problems. Often this infrastructure can also be developed to serve nearby communities as one of the local benefits from the resort development. Conservation-oriented infrastructure techniques should be applied, such as treatment and recycling of sewage effluent for use in landscape and golf course irrigation, use of solar energy for water heating and other purposes, and use of natural ventilation in tropical areas to, in some cases, preclude the need for air conditioning. In coastal areas that have limited availability of fresh water, techniques such as reverse osmosis can be applied to desalinate salty water in order to provide adequate fresh water supplies for the resort.

Factors Affecting Tourism PlanningTourism planning, as a complex activity that involves many different parties, is subject to a number of pressures and factors that can influence the planning process and the persons involved in it. These pressures can be particularly numerous and forceful in cases where there is an expectation that tourism will solve a range of economic and social problems. Unfortunately, this expectation often occurs in communities that are economically depressed which in turn creates budget constraints that reduce the ability of government to fund and support the industry. In some communities, on the other hand, government planning efforts are constrained not by funds but by pressure to lessen planning regulation and to leave the development of tourism to the private sector. In these cases, often there is the fear on the part of individual businesses that cooperation and planning with others will lessen their individual competitiveness.Sometimes tourism planning must contend with skepticism of the need for and benefits of tourism on the part of residents. Residents may be wary of the negative impacts of tourism development. A common and often powerful factor in tourism planning results from pressure to protect the environment on the part of the public and, in particular, by environmental groups. Planners deal with public skepticism and interest group pressures by encouraging wide participation and input in the planning process. However, the complexity and cost of setting up a planning process and structure that provides for

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extensive participation and input can be quite high. Finally, the planning process must deal with the ongoing, market-related competitive pressures resulting from constantly changing technology, the emergence of new destinations, and changing preferences of visitors.

c) DevelopmentAlthough development is often thought of as a private sector activity, there are circumstances in which the government can play a useful, and sometimes necessary, role. For example, in many cases the existing private sector may lack sufficient size and capital to undertake the development of a destination on its own. In these cases, government may get involved by taking the role of developer, or by taking on a partnership role as the provider or guarantor of capital, or in any of a number of other ways. Sometimes, in cases where certain areas have been designated and planned for tourism development, the government may wish to control the overall development by assuming the role of lead developer. In this way, the government can coordinate the construction of the actual visitor facilities with necessary improvements in infrastructure or other activities such as education and training.There are certain projects that, by virtue of their size and importance to the country or destination as a whole, almost always require a leading government role. Airports, major land transportation projects, and water-related projects that involve dredging are examples of such tourism-related projects. Governments have the ability to fund such projects by issuing bonds and other financial instruments, thereby providing an essential element of the development process that the private sector often cannot.

d) RegulationThe regulatory role of government is very important for the tourism industry, because so much of it is intended to protect the consumer.Government regulation plays a critically important role in protecting tourists and enhancing their travel experiences in many ways, including:• Consumer protection laws and rules that require travel agencies to deposit their customers’ advance booking deposits in a trust account, to ensure that the moneys will be used for the purpose of securing their reservations.• Fire safety laws that mandate a minimum number of exits and emergency lights on each floor of a hotel, in case of a fire.• Health and food safety regulations that require food service establishments to maintain minimum standards of safety and sanitation.• Competency standards that require bus and boat operators to possess requisite skills and knowledge.Regulatory actions often arise from a concern for a destination’s environmental and cultural resources. Certain protective regulations restrict activities on, or access to, vulnerable environmental areas. Examples of this would be a limit on the kinds and numbers of tour boats that could operate in a scenic waterway to prevent undue damage from overuse, or limiting hikers to only certain mountain areas to prevent damage to a rare plant species. Another type of law might limit the serving of alcohol or the performance of certain cultural displays to certain days to minimize negative effects upon local customs.

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To the extent that increasing numbers of destinations rely on environmental and cultural features to differentiate themselves from other destinations, these types of protective regulations will become more important.Perhaps the most critical area of government regulation with respect to international tourism is that of aviation. For most countries, tourism growth requires growth in airline service. Air service, in turn, is heavily dependent upon the bilateral agreements between countries that govern all aspects of air transportation between them. The airline industry has always been highly regulated, for two main reasons: first, air travel requires technical and operational standards to ensure the safety of air travel; and second, governments have generally tried to retain tight control over the economic and commercial aspects of air travel involving their countries.Air regulations have traditionally been protectionist in nature. Areas in which protectionist regulations have been used include the specification of air routes, restrictions on airline ownership and control, airline capacity, and tariffs. The complexity of the issues involved in air travel regulation, and the ways in which issues of international relations and national pride get tangled in air regulation, means that the negotiation of air agreements remains a highly contentious and political process. More recently, as more countries take measures to deregulate and privatize their airline systems, and as they become more aware of the negative effects of airline regulation on tourism growth, there has been increased pressure for a more liberal air regulation.

CONCLUSIONA successful tourist destination rarely happens by accident. Rather, it is the product of careful planning in a number of critical areas. In a comprehensive analysis of the development of a visitor destination, these areas range from the visitors themselves to the local infrastructure. The experience of many destinations has demonstrated that such a comprehensive analysis is necessary to anticipate the wide range of impacts that tourism brings to a society. In the past, tourism planning had often been reactive due to the inherent difficulties of dealing with the future and to the nature of the organizations in which many planners have worked. Because of the difficulties of forecasting and projecting the future, plans and policies often did not meet their stated goals and in many cases also brought about unexpected results.The resulting crisis in planning, as well as the accumulated experience in this area, has brought about a more realistic view of the limitations of planning, led to the development of planning mechanisms that deal with uncertainty and change, and produced a better quality of planning product and process.Experience has also shown that planning is critical to the long-term economic viability of the industry. Sooner or later, the problems of an unplanned destination will become apparent to its tourists, who, in today’s competitive market, will opt for other destinations. Planning a destination according to the principles discussed in this chapter can be time-consuming and contentious, as various parties–developers, government, the local population–press for their own goals. However, the process itself is designed to bring issues out before decisions are made, construction begins, and mistakes become costly or irrevocable.

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