Tourism for Economic Growth


Prof. Monish Gunawardana International University of Management, Namibia According to the assumptions of the Vision 2030 Policy Framework, by 2030, the Community Based Natural Resource Management (CBNRM) will generate more than N$8 billion and that income will help to reverse the rural poverty and speed up the economic growth. Therefore, Namibia’s service industry is a core economic sector that will accelerate the socio-economic development. The tourism and hospitality industry come under that service sector. Reasons to Travel The human being is genetically engineered to appreciate natural beauty. Our pre-historic ancestors searched for new areas not only for survival, but also for their happiness and sheer curiosity. According to some anthropologists (Leakey & Lewin: 1978) hunter and gatherers, such as the San (Busman) of the Kalahari desert, travelled long distances for social reasons, not only compelled by shortage of food, as had been originally assumed. Therefore, human beings are prepared to spend their excess time, money and energy to satisfy that inborn thirst-happiness. Rapid economic growth increases people’s income and they use a part of that newly gained wealth to buy happiness. Tourism is a good source of happiness for them. Nowadays, wealthy people and senior citizens with the substantial disposable income travel extensively. Moreover, the senior executives in the corporate sector, multilateral agencies and NGOs are frequent travellers and their spending power is very high. In addition, other motivational factors such as age, gender, education, life-style-change, psychological needs, and cultural motivators decide the patterns of travel. Our Economy and Tourism Namibia is a country with wide income disparities. Nearly 54 percent of our people live on N$14 (US$2 per day). Nami-bia’s unemployment rate is as high as 34 percent. Rural poverty together with the high prevalence rate of HIV infection (20%) can reverse the GDP growth and increase the unemployment rate further. The fall of diamond production, slow progress in the fishing industry and soaring fuel costs have crated a negative impact on economic growth and employment creation. Our tourism industry generated N$2.8 billion to the national GDP in 2004. And it is responsible for around 23 percent of the national income. It is believed that every 100 tourist arrivals can generate eight employment opportunities. In 2004, around 90 000 tourists visited our country and they created 7 200 jobs for Nami-bians. Moreover, Community Based Tourism (CBT) that target rural poverty reduction and bio-diversity conservation could generate only N$27 million through 31 conservancies. Hence, the tourism industry is a core economic sector that should be protected and further developed to reach our development goals. Global Trends According to the World Tourist Organization (WTO), the tourism and hospitality industry is a strong economic sector in the world and is responsible for 5 percent of jobs globally. This industry is the major income source for some countries. For instance, the economies of Switzerland and Thailand are exclusively depending on tourism. In 2004, 49 percent of tourists visited Asia-Pacific countries and only 3 percent of international tourists visited African countries. Anyhow, in 2004 around 90,000 tourists visited Namibia. The factors which determined the poor performances in the tourism sector in the African continent were soaring fuel prices, airport costs and maintenance expenses. However, the 9/11 attack, volatile exchange rates and the gradual revival of long-haul markets are other factors that influenced the decrease of tourist arrivals to Africa. Pricing in Tourism A tourist product is impossible to be stored for future use and an unsold product or service is revenue that is lost forever. This will decide the profit margin, especially when the high fixed costs incurred by the industry are considered. Tourism pricing affects the future demand. Therefore, those who introduce low prices encourage the sustainable demand. Namibia is sometimes rated to be an expensive destination. Tourism pricing is a key tool that should be used by developers and entrepreneurs to protect the tourism industry. Also, the pricing in tourism should be devised to attract more tourists to our country and entice them from our regional and international competitors. New Products/Services Because of the emerging economic prosperity in Asia, more people with disposable income will begin to travel. Those new consumer trends, technological developments, market competitiveness, and globalization will demand innovative products and services to attract new tourists and business travellers. The proposed Eliakim Namundjebo Plaza Complex in Windhoek is an N$800 million investment that can transform Windhoek as a regional business-service center. Besides that, our existing infrastructure is strong enough to promote Namibia as an international business destination for the meeting industry and exhibition services. Johannesburg is a popular business-tourism destination with world-class exhibition venues: Coca Cola Dome, Gallag-her Estate, Johannesburg Expo Center and Sandston Convention Center. In addition, Cape Town International Convention Center is expected to pump R10.4 billion into the South African economy by 2010. And it has already created 2 347 jobs. Unfortunately, our resources are mostly underutilized. Sustainability of Tourism A country blessed with astonishing scenery, and ethnic groups, abundant animals, plants, deserts, beaches and sunny climate often becomes a prime tourist destination. And Namibia has all of them. For example, wildlife conservancies such as Namibia’s Ethosa and Botswana’s Chobe and South Africa’s Kruger have saved threatened species from existence. Hence, concerted efforts are vital to discourage the over-exploitation of the environment that is the very basis of this industry. Tourism in Kenya was a big business. The success of the tourism industry in Kenya generated severe problems in sustaining the essence that tourists expect to discover. Many Kenyan conservancies have become big zoos and human-animal conflicts have destroyed the harmony of the nature where the local Maasai tribe threatens to kill animal unless the problem is addressed. No legislation can protect them without the participation of communities living near these conservancies. However, when tourism begins to provide income and becomes community-oriented, beneficiary communities will not hesitate to protect their source of income. Tourism is an incentive to protect the natural environment. Namibia’s 31 conservancies cover 80,000 square kilometers and they are popular tourist attractions. Currently, income generated from the community-based tourism enterprises is nearly N$30 million. Thus, the Namibia Community-based Tourism Association (NACOBTA) should plan to develop a partnership between the communities and private sector’s small and medium tourism enterprises. Future Developments Shafer and Moeller (1994) have identified 25 future development areas in the tourism industry. Their research was conducted in 1992 in Spain where 25 experts in tourism were interviewed to understand the future direction. According to them, ICT and science may create a strong effect on tourism planning and project development. These forecasted developments will be based on artificial intelligence, robotics, new recreational products and advanced transportation systems. Moreover, the multi-store floating hotels, underwater hotels, theme parks, artificial environments, video cycles and night vision systems that allow participation in outdoor recreation in the dark, are some of the future developments in this industry. Best Practices Tourism is booming worldwide making up the massive part of the global economy. This is a very competitive business. Hence, we should employ the best management practices to transform the tourism and hospitality industry as a key component of our service sector. In addition, we should focus on the emergence of ‘mega-systems’ that comprise several interchanges systems between the components of tourism. A good example in this regard is Rupert Murdock’s venture with ‘Ultra Switch.’ This is an international network that links travel offices, hotel and airline reservation systems via satellite communication. Finally, it is necessary to keep our eyes on environment preservation and the socio-ethical aspect of this promising industry that will certainly play a pivotal role in our Vision 2030 project.

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