Lesson 3: Tourism Development

The Relation Between Tourism Planning and Tourism Development

- The tourism-development plan, on the other hand, provides overall guidelines for development, outlines broad development concepts and identifies individual development opportunities worthy of in-depth analysis through feasibility studies and cost/benefit analysis.

The Roles of the Government and the Private Sector in Tourism development

- Private sectors its principal role is to provide tourism facilities and services to the traveling public while maximizing financial returns. It also provides a large proportion of the capital funds for investment in tourism projects through its financial institutions, corporate leaders and individual citizens. Private organizations also play an important role in tourism development in many destinations. These organizations include chambers of commerce, travel associations, foundations, historical and cultural societies, recreation and sports association religious groups, and the like. They operate attraction such as historical/cultural centers, museums, art galleries recreation and community.

Steps in the Tourism Project Evaluation and Analysis System

- The seven steps in the tourism project evaluation and analysis system are:

1. Prefeasibility Study2. Site Analysis3. Market Analysis4. Economic Feasibility Analysis5. Cost/benefit Analysis6. Government Financial Incentives in Tourism

Development7. Private Sector Financing for Tourism

Development

1. Prefeasibility Study- Determines the justification of a

more detailed economic feasibility study of a project and the subjects which the detailed study should tackle.

2. Site Analysis- A large proportion of tourism-related

projects require physical site-location. An economic feasibility study can either specify a site or determine if any appropriate site exists within a geographic area.

3. Market Analysis- The market analysis usually begins

with the collection and review of secondary sources of information since it gives a clear picture of the type and scope of original market research needed.

4. Economic Feasibility Analysis- The economic feasibility analysis

determines the capability of a project in producing satisfactory financial return for its investors.

5. Cost/Benefit Analysis- Commercial projects found to be

economically feasible may or may not have to be further analyzed using the cost/benefit analysis techniques. Cost/benefit analyses are usually carried out by or on behalf of government agencies.

6. Role of Government Financial Incentives in Tourism Development

- Government financial incentives for tourism projects are classified into two categories namely: fiscal incentives, and direct and indirect incentives. Fiscal incentives are special allowances for income tax and other tax purpose. Direct and indirect incentives include several programs aimed at easing the financial requirements of tourism projects.

7. Private Sector Financing for Tourism Development

- Private sector is to provide tourism facilities and services to the tourism and at the same time maximize profits. The role of the public sector is to complement the efforts of the private sector. The public sector stimulates the development of individual tourism projects through several types of financial incentives.