T O U R I S M

TOURISM DEVELOPMENT: OVERVIEW

D E V E L O P M E N T

Tourism development involves broadening the ownership base such that more people benefit from the tourism industry, skills development, job and wealth creation and ensuring the geographic spread of the industry throughout the province. A. The Relation Between Tourism Planning and Tourism Development The tourism-planning process is designed to produce goals, strategies, and objectives for the destination area related to tourism development, marketing, industry organization, awareness and other support activities. 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. In carrying out tourism development in a destination area, it is necessary to first establish overall development guidelines to be sure that when development occurs it complies with the areas economic, social/cultural and environmental policies and goals. It is also important to provide specific guidelines describing the basic characteristics of the scale quality and types of development it wishes to accomplish. B. The Roles of the Government and the Private Sector in Tourism Development The government and the private sectors have important roles in tourism development. The role of the private sector is more limited and more clear-cut. Its principal role is to provide tourism facilities and services to the travelling public while maximizing financial returns. The center of the private sectors involvement in tourism development is the entrepreneurial role. It involves: y Idea generation y Development project implementation y Financial risk-taking and investment y Management of operations The private sector provides specialized technical skills required in the development process through tourism consultants, market research firms, economists, architects, engineers, designers, project managers and builders. It also provides a large proportion of the capital funds for investment in tourism projects through its financial institutions, corporate leaders and individual citizens. Non-profit private organizations also play an important role in tourism development in many destinations. These organizations include: y Chambers of commerce y Travel associations y Foundations y Historical and cultural societies y Recreation and sports association y Religious groups, etc. The roles played by these groups vary but typically they operate attractions such as historical/cultural centres, museums, art galleries, recreation and community halls. The most important widely-accepted function of the government in tourism development is to act as catalyst and to complement the effects of the private sectors including non-profit organizations. The WTO points out that as a general principle, the government should not do what the private sector is able and willing to do. Although this is genenerally-accepted principle, instances of overlapping activities and conflict between the public and private sectors arise due to the following reasons:

1. The private sector is not willing to finance the development of the project because of its limited profit potential; the government however has given the project high priority due to its regional economic contributions or its pivotal role in encouraging tourism activity. 2. An existing tourism facility that is bankrupt cannot be sold on the market; the government feels obliges to buy the facility. 3. The government stands to provide low-cost vacation opportunities for disadvantaged groups such as the poor, the sick, the aged; this is often called social tourism. 4. The government wants to encourage private-sector development by initiating new types of development through demonstration or pilot projects. C. Characteristics of Individual Tourism Development Project The 9 criteria which will assist a government agency in identifying desirable projects are the following: 1. Economic Contribution the project creates a significant level of income and employment benefits. 2. Environmental Impact the project is developed in compliance with existing legislation and regulations governing the conservation and protection of the environment. 3. Social Cultural Impact the project does not jeopardize the social well-being of the citizens. 4. Competitive Impact the project complements, rather than competes with the existing tourism business without seriously jeopardizing the financial viability of any individual enterprise. 5. Tourism Impact the project adds to the destinations tourism potential by creating an attraction, by improving the areas capacity to receive and cater to visitors or by being beneficial to the tourism industry. 6. Developer and Operator Capabilities the developer and the operator of the project must be capable of developing and operating the business successfully. 7. Compliance with Policies, Plans and Programs the project complies with the tourism policies, plans and programs of the destination. 8. Equity Contributions the project is profit-generating; the investors have enough equity to include in the venture. 9. Feasibility the project is profit-generating; it is economically feasible.

STEPS IN THE TOURISM PROJECT EVALUATION AND ANALYSIS SYSTEM 1. Feasibility Study - Determines the justification of a more detailed economic feasibility study of a project and the subjects which the detailed study should tackle. - The prefeasibility study can be completed by private developers, by a government or by private consulting organizations of the developers and/or a government agency. 2. Site Analysis - A large proportion of tourism-related projects require physical site-location. TOURISM PROJECT SITE CRITERIA CATEGORIES: o Market-related site criteria o Criteria related to the physical characteristics of sites o Other criteria 3. 4. 5. 6. 7. Market Analysis Economic Feasibility Analysis Cost/Benefit Analysis Government Financial Incentives in Tourism Development Private Sector Financing for Tourism Development