The Economics of Tourism - Maximising the Benefits of Ecotourism for the Locality

This paper examines the economic impacts of tourism and considers, in particular, how the benefits to the local economy from ecotourism development can be maximised. Although it does not directly address them, this is a discussion of relevance to the growing interest of developing countries (including Iran) in developing their tourism sectors as a source of foreign currency income. It also relates to the approach of Agenda 21 (UNCED, 1992b) in which tourism is viewed as a form of land use with potential significance for improving both the economic and environmental sustainability of a region if it is correctly developed. The World Summit on Sustainable Development (Johannesburg, 2002) placed ecotourism development for the preservation of biodiversity as one of its five major areas of action. It can provide a suitable response to the need for economic regeneration and job creation in remote areas where the traditional industries can no longer satisfy these needs on their own. The aim of this paper is to analyse the economics of ecotourism development on the macro and micro levels in order to address the question of how far ecotourism development can provide the basis for local economic development. To this end, the economic impacts and the scale of the ecotourism industry worldwide are examined. This examination serves to clarify the way in which tourism projects should be developed to ensure both economic and environmental sustainability. There is an intriguing paradox relating to the economics of ecotourism that is worth some exploration. On the face of it, the small-scale character that typifies ecotourism projects would appear to be in contradiction to the desire of governments to realise significant returns on their investment in the tourism industry. However, experience would suggest that (a) mass tourism is a very unreliable source of income over the medium- to long-term (due to the fickle nature of the industry) and (b) well managed, quality ecotourism products can be very profitable for economy of the destination and its region. Thus ecotourism can offer not only an environmentally sustainable option but also, potentially, a more economically sustainable one. In order to illustrate certain points and as an aid to analysis, a case study of ecotourism development in Scotland – a country heavily reliant on agriculture and the fishing industry - is presented.