Costs & Benefits of Tourism (SL IB Geography)

Benefits of tourism

• Tourism can provide economic development for lower-income and emerging nations if they do not have access to raw materials for manufacturing
• Tourism is sometimes regarded as an export
  • Goods and services are not subject to price fluctuations of commodities on the world market
• National tourism strategies are government policies to encourage tourism
• Tourism can benefit unemployment levels in both rural and urban environments
• Tourist jobs include
  • Catering
  • Transport
  • Guiding
  • Accommodation workers
  • Food production
  • Construction through the building of hotels and other infrastructure
• Tourism can also provide new skills for people, such as learning multiple languages
• The multiplier effect takes place when income generated by local people is circulated back into the local economy

The multiplier effect in tourism

Costs of tourism

• Leakage - due to foreign ownership of many aspects of the secondary resources such as hotels much of the money made does not remain in the country but is lost to the foreign owners
• Employment for local people is often low-skilled and poorly paid
  • Jobs in management are often filled by workers from the countries where the TNC headquarters are located
• Price increases occur in local businesses as tourists can pay higher prices
  • This impacts locals menacing they are less able to afford goods   
• Inequality occurs because some areas attract more tourists than others
• Water usage increases as tourists use large quantities of water
• Land is used for building resorts, hotels and other facilities such as golf courses

Tourism in Small Island Developing States (SIDS) 

• Small islands often rely on tourism for economic development
• There are benefits to tourism for SIDS:
  • Manufacturing is unlikely to be possible due to the small land area
  • Tropical islands have many natural attractions, such as beaches, rainforests, and coral reefs
  • Tourism is not restricted by quotas or tariffs
  • Direct and indirect employment provides jobs 
• There are negatives of tourism for SIDS:
  • Can be negatively affected by global pandemics
  • Transport and accommodation costs can be high

Tourism in Bermuda

Location of Bermuda

Facts about Bermuda

• Bermuda is a British Overseas Territory in the Atlantic Ocean
• It is 21 square miles
• Population size of 63,867 (2021)
• In 2019 (pre-COVID-19) tourism was the second-largest industry in Bermuda and accounted for over 5% of its GDP
• In 2022, tourism accounted for around 3% of the GDP
• The terrain is hilly, with the highest location at Gibb's Hill, which is 260 feet above sea level
• Bermuda is an archipelago of seven main islands and some 150 other islands and islets
• The islands have a subtropical climate
  • The annual mean temperature is 70.2°F
  • The average annual rainfall is 57.6 inches
  • High humidity throughout the year makes summers sticky and warm and winters cold and damp
• There are no rivers or lakes on Bermuda and water supply is through rainfall harvesting or desalinisation

Tourism in Bermuda

• Each year, an average of 405,000 visitors arrive on cruise ships
• In 2023, 505,217 visitors in total visited Bermuda, compared to 605,003 visitors in 2019
• The Bermuda Tourism Plan was launched for 2019-2026

Success Indicators for the Bermuda Tourism Plan

Tourism will contribute $1.2 billion to GDP (average 4.5% leisure visitor growth per year)

30% of visitors will arrive by plane in the summer (25% in 206/17)

More than 56% of leisure arrivals will be in non-summer - September to May (52% in 2017)

More than 8% of air arrivals will be African Americans (4% in 2017)

More than 83% of people will recommend Bermuda to family and friends (76% in 2018)

More than 70% of residents will support tourism development (61% in 2018)

• According to tourism figures reported by the Bermuda Tourism Authority, the reasons for tourism are:
  • Vacation
  • Destination weddings
  • Sporting events
  • Business
  • Visiting family and friends
• Over three quarters (76%) of visitors are from USA, 7% Canada, 9% UK, 3% Europe, and the remaining are from other places

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Tourist destinations in Bermuda

• Economic importance:
  • Tourism is the second largest industry after insurance/reinsurance
  • Tourism is a significant employer, both directly and indirectly
  • There is little agriculture; the majority of food is imported onto the island
  • Manufacturing accounted for only 0.35% of GDP in 2021
  • The government recognises the importance of tourism. It has a dedicated department and separate authority to increase tourism
  • In 2022, the average spend per air visitor rose to $1,852 per person, up 24.8% from 2019

People employed in tourism in Bermuda

	2019	2021
Direct employment	3240	1137
Indirect employment	493	196
Wage income	$340 million	$159 million

Vulnerability of tourism in Bermuda 

• All tourism is vulnerable to both external and internal factors
• Vulnerability to external shocks:
  • Tourist demand and revenue grew rapidly up to 2019
  • Impacted by COVID-19 from 2020-2021 as the island shut down to flights and cruises
  • Rising sea levels have been recorded by the tide gauge 
  • Bermuda is affected by hurricanes, which take place from May until November
    • Highest record hurricane storm surge of 0.86m (2.8ft) for Hurricane Nicole in 2016
  • Sea temperatures are increasing, which is affecting Bermuda’s coral reefs and tourism activities linked to them
• Vulnerability to internal limitations
  • The average tourist consumes more water than the average Bermudian 
    • Almost all water for hotels is provided by desalinisation
    • Bermuda uses rain tanks to collect rainwater for drinking
  • There are no economic minerals and agricultural potential is very low because of the limited land size
  • The amount of solid waste pollution produced by tourists is high
    • Waste is taken to an incinerator and to a landfill
  • Salaries paid to local people tend to be low-paid and seasonal

Reducing vulnerability

• There are a range of ways of reducing Bermuda’s vulnerability to external shocks and internal limitations. These include:
• Promoting electric vehicles
• Advising establishments on greener hospitality services for waste
• Work with environmental groups to increase environmental practices
• Improving accessibility for disabled tourists
• Working with the government on out-of-date tourism regulations
• Using community outreach programmes to encourage more Bermudians to work in the tourist industry
• The development of the African Diaspora Heritage Experience 
• Providing a focus on key sports such as sailing and golf
• The setting up of Bermuda’s own airline, which targets travellers from the east coast of the USA
• Investing in hotels such as the Southampton Princess through the Fairmont Southampton Hotel Act
• Making the Southampton Princess an Anchor hotel sponsored by the Bermuda government
• Bermuda hotels have signed up to a guarantee scheme against hurricanes