Economic impact of Tourism: Pacific Rim Essay

Introduction The Pacific Rim is a grouping of countries in the Pacific Ocean1 that start from the Korean peninsula down through south East Asia. Some of the common countries in this region are; Thailand, Hong Kong, Indonesia, Vietnam, Cambodia, Singapore, Malaysia, Brunei. The current economic situation has been gleam with poor performance from the main economic activity agriculture. To alleviate the situation we must look at tourism as a way of sustaining recommended economic growth. The Pacific Rim has a rich relationship with the tourism industry, with people all over the world highlighting the regions population for good hospitality. Countries like Indonesia and Thailand have used tourism to assist build formidable economies. Tourism within this region is mainly based on leisure along its warm beaches and historical and cultural tours. The average number of tourist in this region per country is relatively high ranging from 5 million in larger destinations like Indonesia to 1 million in Vietnam. Seasonality in the region has its Peak seasons set from July to Oct and Dec 15th to Jan 15th and low season from October to April. Economic Impacts of tourism Foreign exchange earnings International tourist coming to the area will bring in much needed foreign exchange into the local economy. The small pacific island of Samoa gained S $148. 7 million in foreign exchange through tourism in 2001 up S$ 109. 9 million $ the previous year according to their central bank2. The local government and tourist bodies should enforce that international tourists pay in U. S dollars or other stable world leading currency that can be used in stabilising the countries balance of payment. To maximise foreign exchange earnings efficiency, countries where imports are attained from should be targeted for tourism promotion, so as to allow influx of there currency. E. g. if most of the mechanical imports come from Switzerland the government usually has to source Swiss Francs. This can be done by targeting Swiss tourists. Rise in Gross National Product Tourism is an economic activity that provides to the GNP and per capita income of a country. In countries with rich tourist history it could provide up to 25% of the local economy. In 1994 Korea3 for instance set up a successful 5 year plan that help them achieve a U. S $ 500 million income from tourism this target was shifted to US $ 10 Billion for the year 2000. (ref) Increased revenue for the government Government income rises in form of taxes; this could range from a multiple of options; Visa fees; this is fee issued to passport holders of all or select countries to gain entrance into the country. This can income can be sort after at the entry port i. e. airports, harbour docks or International rail stations or at the Countries embassy/Consulate/ High commission in the country of tourist origin. The visa fees are usually categorised by the duration of stay, the frequency of return trips and reason for entry. 4 Value added tax: This is tax on all good, commodities and services acquired. This does not differ from local citizen to international tourist. Training levy: This is a tax that is common in developing countries, that is attached to the direct development of tourism. It is usually enforced by all registered hospitality organisation, at a nominal rate of approximately 2% this money is used to support hospitality schools country wide which ensure to the sustainability of quality service in the destination. Eco-tax: a fairly new concept that put a surcharge on all tourists going to an area, this income is used by the central or local government to support environmental conservation efforts in the area. It is commonly referred to as Balearic tax5 in European countries. It is important that the tax rate or amount collected off set the actual cost incurred in hosting the tourists. A generator of employment Opening up an area to tourism brings in new employment opportunities directly in the tourism and hospitality sector as well as feeder and supply industries. If the area is prospering thanks to tourism then all other sectors are likely to also get into an economic up swing, thus also providing more employment. Improvement of social services The tourism industry is a sector that depends on good infrastructure. The local area will profit from improved services like; Transport: Rail, Air, Water Health services: Hospitals and clinics Water and power supply: Clean sanitary water to international tourists standards, Good steady power supply, with an expanded network Communication; Repair and introduction of new communication mediums. This are initially introduced to serve the tourism industry but eventually trickled down to the local community. Tourism development may lead to an introduction of a wider array of goods and services that may be of a higher quality. This new economic sector could see the introduction of imported goods that will both improve household and commercial goods and services. Encourage business atmosphere The local business community will gain by getting the opportunity to invest in the new opportunities in tourism. Feeder business opportunities created, alternative trade that can flourish A prosperous community with improved social services creates an air of good business environment that will help improve the creativity and diversity of ideas. Economy opportunities created due to awareness (of the rest of the world) contact (by locals with foreign visitors) that tourism brings about. Tourist can turn into investors. Investors can come looking for opportunities once the region is opened up Offer alternative or/and assist traditional industries Ease over reliance on a traditional economic activity e. g. Agriculture, plus may also promote it. The hospitality industry has a large emphasis on culinary experience, thus there it also creates a high demand for agricultural products. By encouraging tourism one would also be encouraging the agricultural sector. This is in the condition that the farm produce can be utilised in the hospitality and that the tourism industry promotes local produce as opposed to importing. Promote time after harvest season when agriculture is at low season. One easy way of promoting the agricultural industry without clashing with tourism is by establishing agro-tourism. Agro tourism is tourism in which tourist’s board at farms or in rural villages and experience farming at close hand. This is a good way of using the agricultural layout to make additional income. New group of economically stable professionals in that are to stimulate growth As the tourism industry grows there will be the generation of financially advantaged locals and expatriate6 community that will create a new market segment that are economically powerful. Political Stability[WKK1] World’s economies are closely tied to political situations. If the new tourism developments are well initiated and the majority of country cross-section are prospering from it in one way or the other then the political situation is bound to be more stable. Prosperous citizens are less revolutionary. Conclusion and recommendations Payments to local companies, foreign exchange control. Local ownership. Top jobs should be open to locals. Tourism should not become the single most important economic activity. 1 Find a map of the region in the appendix 2 Refer to the Samoa information Website link 3 Information derived from: Marketing Korea as tourist destination by Gordon Waitt. University of Wollongong Australia. Tourism management Articles Vol. 17 No. 2. Pg 113-121 1996. 4 Refer to appendix of illustration of the different visa application fees as per the Indonesian government. 5 Tourism and environmental taxes. With special reference to â€Å"Balearic ecotax† by Teresa Palmer and Antoni Reira. University of Majorca Spain. Tourism management journal 24, 2003 6 Refer to XXXX academic journal for a indication of expatriate influx in the Pacific region. [WKK1]Good economy leads to political stability which comes back to an even better economy.