Running Head: TOURISM ON ISLAND NATIONS

Comparative Analysis of the Economic impacts of tourism on Island Nations

Brooke Wurzburger

HRTM 280

Dr. Turk
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TOURISM ON ISLAND NATIONS

Tourism is a very important industry all over the world but for smaller island nations who

do not have much else to rely on for their economy their success in the tourism industry is vital.

Poverty can be very common for many of these countries and successful tourism can bring

countless jobs and resources, which can help the wellbeing of a country as a whole. Many

tourists look for new experiences and with many island destinations it can feel like they are

getting the same thing with a beach and island ambiance, so it can be difficult for these island

nations to get out of the vicious poverty cycle. It is feasible for all of these places to become

successful in tourism and other exports because they have a foundation and appeal based on

being surrounded by oceans. It is very important to bring in effective marketing techniques in

order to attract a crowd of tourists and to create an infrastructure that can support them.

Depending on the sovereignty of the island nation, they can get funds from the government they

are under, but it is still difficult because the funding is never enough. Tourism and ecotourism

are effective industries for island nations to help increase their GDPs and create a stable

economy, but they need a well working government, room and funds for tourism infrastructure, a

way to market their island(s) over others, and mitigation and long-term plans for issues that

tourism or natural disasters may cause.

The first thing an island nation needs to be successful in tourism is a stable government

or governing body that is willing to provide funds for the infrastructure needed. Multinational

companies who want to build their hotels and be able to make funds through the islands economy

approach many of these places. “The decision whether to encourage or discourage tourism is

mostly in the hands of multinational companies” (Wilkinson, 1989). If a government is corrupt it

can take the money that tourism makes away from its people and work with the companies to get

their own compensation. For example, when an island, or inland country for that matter, is going
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thorough corruption, protests, and other unrest people are less likely to invest or visit that place

because people value their safety over most things. A good example of this is Fiji, “tourism

arrivals are sensitive to political unrest and the effect of unrest was seen when hotel occupancy

rates fell by 25% following the 1987 coup and again by the sharp decline in tourism following

the unrest in 2000” (Verdone & Seidl, 2012). An island community needs a good and stable

government to help support their economy and help the residents make a living, and if that is

done through tourism they have to ensure that they are politically sound or else people will be

deterred from going there. Many times they do attract these new customers and can have a

decent inflow of money, but the government does so in their own self interest, ‘“folly’: the

pursuit by governments or other decision-makers of policies contrary to their own interests,

despite the availability of feasible alternatives” (Wilkinson, 1989). Governments need to realize

that they will do better if they work as teams with its residents to attract more people, from more

countries, who can help the island expand in tourism and other areas.

Another reason a strong government is important for tourism is because they set the

regulations and they provide the mends for advertising and marketing. According to Scheyvens

and Momsen (2008), “Around 65 percent of the small island tourism market is captured by

Caribbean islands, followed by Europe (16%), East Asia and the Pacific (11%), Africa (5%) and

South Asia (3%),” so there is a lot of room for expansion in the smaller markets as people want

to explore more new places and have the funds to do so. Governments and companies who have

properties or attractions in these areas that have tourism based economies have to be wiling to

help advertise and make the area look better than others in order to attract new customers from

new markets. All of these islands that are competing for tourism have to make their best features

known in order to get the competitive advantage over other similar islands with similar traits and
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experiences. “Economic development within SIDS (Small island developing states) is often

impeded by inadequate transportation links, lack of accessibility to remote locations, lack of

appropriate skills among the local population and inadequate amounts of local capital”

(Scheyvens & Momsen, 2008). In order for these areas to be successful the most important thing

they need is a trained workforce and funds, and with a strong government presence and qualities

that make them appealing to tourists they can grow their tourism-based GDP’s.

Something that differentiates one island nation from another is their skilled workforce. If

the government creates programs and opportunities for their residents to work in their tourism-

based economy then they will be more successful as a community. On the Seychelles

specifically, “23.87 tourists created one direct job but, with secondary jobs taken into account as

well, only 10.8 tourists were needed to support one job” (Archer & Fletcher, 1996). This

situation is similar to many of these small developing island states because they do not have a

lot, so it does not take much to support the workers. Resorts sometimes even provide housing for

their workforce, which makes it even easier for tourists to support the locals. For mainland

countries resources like AirBNB are becoming popular and competing with the typical ways to

stay such as hotels and hostels, but on these islands most people come for leisure, so they are

looking for the full service experience. This means that as tourism expands and more resorts

come to these places and hire more workers they will have job security because people want the

full experience unlike on mainland countries. With the Pacific islands like Fiji, Tonga, the

Solomon Islands, and Papua New Guinea specifically, “on average, about 79% of visitors come

for holidays at resorts and hotels; around 7% come to visit relatives and friends; 6% are transit

visitors; 4% are business guests, while the remaining visitors fall in the category of official

conferences and recreational activities” (Narayan, Narayan, Prasad & Prasad, 2010). Most island
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courtiers experience the same kind of tourism patterns with an overwhelming amount of tourists

being there for vacations, so as people take more vacation time these places will expand. With

the expansion, more people on the islands will be able to work and thing like the crime rates and

poverty rates will improve as the islands GDP does.

Many of these island countries have very high poverty rates because there is not a lot of

opportunity for advancement in these places. Islands “are subject to small size and population,

stagnant and archaic socioeconomic structure, underdevelopment, peripheral location, limited

resource base (including energy), lack of revenue for imports, high transport costs, lack of local

markets, lack of infrastructure and service industries, etc” (Wilkinson, 1989). Based on their

location, many different islands have their different exports and imports and a lot of times if they

cannot make a lot of exports they have to turn to a tourism-based economy because there is not

much else. They have the advantage where they are surrounded by water so there is a lot of room

for beachfront tourism, but other than that there are not many advantages. Once an island is

overdeveloped, there is no more room for expansion, only improvements within that set

infrastructure, which can leave some of these island nations at a stalemate. If they are tourism

based there is room for growth in new markets, new activities they can create or benefit from

based on what they have around them, and they have an idea of what they have to do to succeed

based on other islands with tourism-based economies who have higher GDP’s. “For 50 of the

world’s poorest countries, tourism is one of the top three contributors to economic development”

(Scheyvens & Momsen, 2008). This is why it is so important that if an island chooses tourism,

they have to commit to it as their main form of economic development. Tourism is one of the

biggest industries worldwide and there are so many services that go into it, which is why it

creates so many jobs. Island states can diversify and do some exporting with things like
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agriculture or fishing, but if they want to increase their GDP, and improve their poverty and

crime levels, the tourism industry is an important segment of the market that they have to get into

and be competitive in.

Islands that get into the tourism industry will be successful in the short term but they will

also face issues in the long term. There are many natural disasters that islands have to prepare for

and mitigate the risks to not lose money in the tourism industry. To prepare for those they need

funds and they have to know how to bounce back quickly. Other issues that island countries

cannot prepare for can also be environmental, but may not necessarily be unexpected. “Warm

temperatures, clear waters and low health risks were the most important environmental features

determining holiday destination choice” (Uyarra, Côté, Gill, Tinch, Viner, & Watkinson, 2005).

These three things are ones that can be severely affected by over tourism. In the long run, climate

change can make certain areas and island inhabitable because they can get too warm which

would make a huge difference because people would have to leave these areas. In the short-term

climate change can make these island nations warmer and therefore more desirable to tourists,

which can make these places more successful in tourism because their peak can last longer and

make more income. Clear waters, the second factor is something that is majorly impacted by

pollution with may of these central islands being near the ocean garbage patches. As plastic

continues to pollute the oceans and their marine life it will be harder to clean up the plastic that

washes up on beaches or people to clean this up. It may in the short-run create more jobs and

cause resorts and multinationals to hire people to clean the beaches up, but in the long run if the

plastic situation isn’t controlled it will be difficult to attract tourism at beach areas where plastic

continually washes up. The third component is low health risks and right now most things are

controlled, but in the past things like the Ebola and Zika virus have deterred people from
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traveling to certain places and island communities for fear that they would be affected. “Tourists

can therefore respond strongly to changes in environmental conditions” (Uyarra, Côté, Gill,

Tinch, Viner, & Watkinson, 2005). If these are the top three things people use to choose their

holiday destinations, many island countries will have to come up with long term plans on how to

battle these issues and other ones that may arise overtime as other sources of climate change or

human pollution issues.

To fight these environmental changes many islands and countries have adopted the

concept of ecotourism or sustainable tourism. Sustainable tourism is very similar to regular

tourism but incorporates environmentally conscious practices into the vacation. Ecotourism can

be more like adventure tourism but based on the natural and exotic environment of a location.

Both of these can be better for these island locations since with ecotourism they can see the

islands natural resources and activities while not having a bad impact, while sustainable tourism

is just the tourism industry doing what it usually does in resorts but being more environmentally

conscious. These both have their positive and negative impacts, “In other words, whilst it

embraces the objectives of environmental sustainability, sustainable tourism does not appear to

be consistent with the developmental aspects of sustainable development” (Sharpley, 2000). In

today’s environment, sustainability has become the most important aspect in most industries

including corporate, medical, and definitely tourism because if the location is impacted it directly

impacts the amount of people that will want to travel there. If nothing changes, “many

environmental attributes will be affected by climate change. Although the extent to which they

will respond is difficult to predict on regional or local scales, many impacts are expected to be

detrimental to the tourism industry” (Uyarra, Côté, Gill, Tinch, Viner, & Watkinson, 2005). It is

extremely important for the big resorts and multinationals to be vigilant with how environmental
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they are and actually make and effort and go beyond to have a positive impact on those island

environments they are part of. As for the people who engage in ecotourism, they also have to be

careful of how much they impact those exotic environments they came to see and they have to

spread awareness on how to help those and other environments based on what they learn from

their travels. Tourism depends wholly on people’s participation, and environmental issues can

cause island states to suffer economical impact if the environment people want to visit is not up

to expectations.

In conclusion, island states hugely rely on tourism to drive their economy. As an island,

they do not have many means to expand their economy, but exporting other resources and

expanding in tourism. This means that they need to have a government that will provide the

funds for infrastructure and advertising for tourism and the training for a workforce that will be

able to provide the services the tourists are looking for. They can also have multinationals who

want to come in and expand their businesses whether it be a resort or other method of hospitality

or adventure provide the funds and jobs to their economies. In the short-run island states will be

able to operate successfully with these tourism based economies, but in the future if nothing

changes sustainability wise they may run into issues. Tourism is a huge sector in the service

industry and is incredibly important in the success of island economies to promote GDP growth,

improvement in their poverty and crime rates, and to put them on the map competing against

other island states and non-island states to be successful for the long run.
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References

Archer, B., & Fletcher, J. (1996). The economic impact of tourism in the Seychelles. Annals of
Tourism Research, 23(1), 32–47.

Mcelroy, Jerome. (2006). Small Island Tourist Economies across the Life Cycle. Asia Pacific
Viewpoint, 47. 61 - 77.

Narayan, P. K., Narayan, S., Prasad, A., & Prasad, B. C. (2010). Tourism and economic growth:
A panel data analysis for pacific island countries. Tourism Economics, 16(1), 169-183.

Seetanah, B. (2011). Assessing the dynamic economic impact of tourism for island economies.
Annals of Tourism Research, 38(1), 291-308.

Scheyvens, R. & Momsen, J. H. (2008). Tourism and Poverty Reduction: Issues for Small Island
States. Tourism Geographies, 10:1, 22-41.

Sharpley, R. (2000). Tourism and Sustainable Development: Exploring the Theoretical Divide.
Journal of Sustainable Tourism, 8:1–19.

Uyarra, M.C., Côté, I.M., Gill, J.A., Tinch, R.R.T., Viner, D. & Watkinson, A. (2005). Island-
specific preferences of tourists for environmental features: implications of climate change for
tourism-dependent states. Environmental Conservation, 31, 1–9.

Verdone M. & Seidl A. (2012). Fishing and Tourism in the Fijian Economy. In:
IUCN Environmental Economics Occasional Paper 2, p. 20.

Wilkinson, P. (1989). Strategies for tourism in island microstates. Annals of Tourism Research,
16 (2), 153–177.