The Economic Impacts of Ecotourism

There are two concepts that relate, but are distinct, ecotourism: economic impact and economic value.

A common ecotourism goal is the generation of economic benefits, whether they be profits for companies, jobs for communities, or revenues for parks.   Ecotourism plays a particularly important role because it can create jobs in remote regions that historically have benefited less from economic development programs than have more populous areas.   Even a small number of jobs may be significant in communities where populations are low and alternatives are few.

This economic impact can increase political and financial support for conservation.   Protected areas, and nature conservation generally, provide many benefits to society, including preservation of biodiversity, maintenance of watersheds, and so on.   Unfortunately, many of these benefits are intangible. However, the benefits associated with recreation and tourism in protected areas tend to be tangible. For example, divers at a marine park spend money on lodging, food, and other goods and services, thereby providing employment for local and non-local residents. These positive economic impacts can increase support for the areas they protect and with which they associate. This is one reason why we embrace ecotourism as a means to enhance conservation of natural resources.

The impacts of ecotourism, or any economic activity, divide into three categories:

Direct, indirect, and induced.

Direct impacts are those arising from the initial tourism spending, such as money spent at a restaurant.   The restaurant buys goods and services from other businesses, thereby generating indirect impacts.   In addition, restaurant employees spend part of their wages to buy various goods and services.  Thereby generating induced impacts.

By identifying the leakages,  the indirect and induced impacts of tourism can be estimated.   In addition, this information can be used to identify what goods are needed. What are not being produced in the region, how much demand there is for such goods, and what the likely benefits of local production would be.   This enables policy makers to determine priorities for developing inputs for use by the tourism or other industries.

Spending per visitor can increasethrough  provision of handicrafts where such provision currently does not exist.   In some cases, there may also be prospects for attracting higher-spending visitors.   Backward linkages can increase through greater use of local agricultural and other products. In order to increase backward linkages and local participation in the industry, it may be necessary to implement or expand capital availability and training programs.   Economic impact analysis can provide valuable information when evaluating the costs and benefits of such programs.  By Kreg Lindberg, PhD  – Lecturer, Charles Sturt University

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