Managerial Economics for Tourism Management.
Tourism and poverty reduction
Asst.Prof. Komsan Suriya
Faculty of Economics, Chiang Mai University December 19, 2008
Tourism generates a lot of money to a country. Some countries earn from tourism more than from commodities exports. An idea is that if the tourism income can be shared to the poor, it will be so good to them to become richer and get out of poverty.
The idea of pro-poor tourism was emerged to find out how to share tourism income to the poor. Some great expectations even hope for a larger portion of income goes to the poor rather than the rich.
The idea remains an idea when the real world situation indicates that the rich control tourism industry. The poor hardly participate in the industry. The poorest of the poor are even much harder to share tourism income. Although literatures such as my Ph.D. thesis showed that poor households participating in tourism will be richer and able to get out of poverty, there is no clear idea how to enhance, empower and encourage the poor to participate in tourism.
Management of pro-poor tourism is then a management of income sharing. Direct contacts between the poor and tourists are difficult. Dressing a poor people with new clothes and pushing him or her to welcome tourists and get money from tourists is only in an imagination. The poor in the real world focuses at their daily agricultural activities. They treat tourists like other local visitors. They smile to tourists, communicate with body language without any understanding of English. They do not have well organized programs for tourists, just to try to entertain tourists with something they have. They are innocent in tourists? perspective. However, tourism is not only about the innocence but also the entertainment, relaxation and pleasure. Tourists will be bored after there is nothing to do more in the village apart of contacting with innocent people. The poor receive nothing from tourists in return for their hours of conversation. They better decide to turn to agricultural activities and think that they are not suitable for tourism.
Indirect benefit is another option. In Mae Kam Pong village, Chiang Mai, Thailand, a part of tourism income goes to a cooperative. While all villagers are members of the cooperative and each villager holds almost equal shares, they gets annual dividend. This is a channel to deliver tourism income to the poor without pushing them too much to contact to tourists or even joining any tourism activities in the village. This income sharing scheme may be criticized whether it is unfair to villagers who put efforts in tourism activities. The poor participate in nothing but get the income share. Is it like taxing the rich and giving to the poor? Why do we have to help the poor like this?
An answer is to ask back. Will you leave your poor neighbors in the same village die without helping anything? This income sharing scheme is like a donation. You get money from spending your efforts and then donate to someone that is weaker than you in the society. Helping them is helping the society, maintaining the community solidarity, helping their families and helping yourself that you have an opportunity to do something good in this life.
Management of tourism for the purpose of poverty reduction is then a management of conflicts in income sharing. The conflicts may occur in many issues listed below.
1) Convincing the rich to donate, in any form, to the poor is a success factor although someone may criticize that it is unfair to the rich.
2) Pushing the poor to participate in tourism in any form is another option although it may be disturbing to other members who are keen in hospitality.
3) Strengthening the linkage between tourism and local agriculture is also helpful even though the agricultural price may be more expensive than those from other sources.
4) Linking the production of handicrafts to tourism is another way although the quality of them may not be satisfied by tourists. Excess supply of handicrafts may threaten the souvenir sector and solidarity among households who produce them.
Understanding among villagers and the power of the village leaders will ease the conflict and shape the income sharing scheme toward a pro-poor purpose.
Managerial economics, in this case, can be useful for the evaluation of options among different income sharing schemes that will yield the most benefit to the poor without creating too much conflicts to the rich. The Pareto optimality where the rich will not step down behind that point and the poor can step upward as much as possible must be investigated.
This article should be referred as
Suriya, Komsan. 2008. Managerial Economics for Tourism Management. [online] www.tourismlogistics.com
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